IP Law Daily, PATENT—Fed. Cir.: Peer-to-peer network patent infringement case reinstated for proper Alice analysis, (Sep 28, 2022)

By Brian Craig, J.D.

The patent claims describe how the particular arrangements of elements is a technical improvement of arranging networks for distributing video content.

In an infringement case involving a peer-to-peer network patent, the U.S. Court of Appeals for the Federal Circuit has concluded that the patent owner has plausibly alleged that the patent claims include inventive concepts and patent eligibility. In reversing a decision of the federal district court in San Jose, California that granted dismissal based on patent ineligibility, the Federal Circuit held that the patent owner plausibly alleges at least two inventive concepts related to arranging networks for distributing video content. The court clarified that useful improvements to computer networks are patentable regardless of whether the network is comprised of standard computing equipment (Cooperative Entertainment, Inc. v. Kollective Technology, Inc., September 28, 2022, Moore, K.).

Cooperative Entertainment, Inc. (CEI) owns U.S. Patent No. 9,432,452 (the ’452 patent) directed at peer-to-peer (P2P) dynamic computer networks. CEI alleges that Kollective Technology, Inc.’s SD ECDN product, when used with Microsoft Teams, infringed the ’452 patent. Kollective moved to dismiss on the grounds that the patent was invalid for being directed to an abstract idea and that CEI failed to plausibly allege that the accused product practiced each and every limitation of the asserted claims. In June 2022, the district court granted a motion to dismiss, concluding that the claims lack patent eligibility under 35 U.S.C. § 101. The patent owner appealed.

Patent eligibility. The Federal Circuit concluded that there are at least two alleged inventive concepts in claim 1 which should have precluded the district court’s holding on ineligibility. Under Alice step two, the court examines the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. The court determines whether the claim elements, individually and as an ordered combination, contain an inventive concept, which is more than merely implementing an abstract idea using well-understood, routine, and conventional activities previously known to the industry.

First inventive concept. Here, the first inventive concept is the required dynamic P2P network wherein multiple peer nodes consume the same content and are configured to communicate outside the content distribution networks (CDNs). Claim 1 recites a specific technical solution that is an inventive concept: it recites a particular arrangement of peer nodes for distributing content outside controlled networks and/or CDNs. The appeals court held that this is not an abstract idea implemented on a generic computer, and it is alleged to improve the performance of the content delivery network with reductions in costs and improvements in several aspects of system performance. The Federal Circuit held that the allegations create a plausible factual issue regarding the inventiveness of the dynamic P2P configuration of claim 1.

Second inventive concept. The Federal Circuit also found that the second alleged inventive contempt relates to segmenting content using trace routes with the P2P network. The Federal Circuit held that useful improvements to computer networks are patentable regardless of whether the network is comprised of standard computing equipment. The record contains concrete allegations in the complaint and the specification that the segmentation limitation was not well-understood, routine, or conventional and recites a specific technique for improving computer network functioning.

While the Federal Circuit did not decide the ultimate issue whether the claims are patent eligible, the appeals court held that there are plausible factual allegations that the claims include inventive concepts to preclude dismissal. Accordingly, the Federal Circuit reversed the decision of the district court.

The case is No. 21-2167.

Attorneys: Meredith Martin Addy (AddyHart PC) for Cooperative Entertainment, Inc. Michael S. Dowler (Park, Vaughan, Fleming & Dowler LLP) for Kollective Technology, Inc.

Companies: Cooperative Entertainment, Inc.; Kollective Technology, Inc.

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