Koninklijke KPN N.V. v. Gemalto M2M GmbH - 942 F.3d 1143 (Fed. Cir. 2019)

Rule:

35 U.S.C.S. § 101 defines patent-eligible subject matter as any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. 35 U.S.C.S. § 101. Laws of nature, natural phenomena, and abstract ideas, however, are not patentable. These categories of subject matter have been excluded from patent-eligibility because they represent the basic tools of scientific and technological work. The concern that drives this exclusionary principle is one of pre-emption. To determine whether claimed subject matter is patent-eligible, courts apply the two-step framework explained in Alice. First, the court determines whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea. Second, if so, 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.

Facts:

Plaintiff-Appellant Koninklijke KPN N.V. (KPN) owned U.S. Patent No. 6,212,662 (‘662 patent). The ‘662 patent varied the way the check data was generated by varying the permutation applied to different data blocks. Claims 2-4 of the ‘662 patent replaced the prior art check data generator with an improved, dynamic check data generator that enabled increased detection of systematic errors that were recurring across a series of transmitted data blocks. KPN sued Gemalto M2M GmbH, Gemalto Inc., Gemalto IOT LLC, TCL Communication Technology Holdings Limited, TCL Communication, Inc., TCT Mobile, Inc., TCT Mobile (US) Inc., TCT Mobile (US) Holdings, Inc., and Telit Wireless Solutions, Inc. (collectively "Appellees") for infringement of the '662 patent in the United States District Court for the District of Delaware. Appellees moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) alleging that all four claims (claims 1-4) of the '662 patent were ineligible under 35 U.S.C. § 101. The district court granted Appellees' motion with respect to all four claims. Applying the two-step framework laid out in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 134 S. Ct. 2347, 189 L. Ed. 2d 296, 82 L. Ed. 2d 296 (2014), the district court found all claims of the '662 patent to be ineligible because they were directed to an abstract idea and contained no saving inventive concept. On appeal, KPN challenged the district court's ineligibility decision with respect to dependent claims 2-4.

Issue:

Were all claims of the ‘662 patent ineligible for being directed to an abstract idea and for containing no saving inventive concept? 

Answer:

No.

Conclusion:

The Court held that claims 2-4 of the ‘662 patent were patent-eligible because they were directed to a non-abstract improvement in an existing technological process (i.e., error checking in data transmissions). By requiring that the permutation applied to original data be modified "in time," claim 2, which was incorporated into all appealed claims, recited a specific implementation of varying the way check data was generated that improved the ability of prior art error detection systems to detect systematic errors.