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Customedia Technologies: An Exploration in Patent Eligible Technological Improvements v. Abstract Ideas for Data Delivery Systems

In Customedia Techs., LLC v. DISH Network Corp., the Federal Circuit affirmed the Patent Trial and Appeal Board’s final written decisions holding that claims 1-6, 8, 17, and 23 of U.S. Pat. No. 8,719,090 (the “’090 Patent”) and claims 1-4, 6-7, 16-19, 23-24, 26-28, 32-36, and 41 of U.S. Pat. No. 9,053, 494 (the “’494 Patent”) are invalid under 35 US.C. 101 as being directed to patent ineligible subject matter.  While perhaps a straightforward application of the two-step patent eligibility framework articulated in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014) to the advertising claims at issue, the decision includes potential guideposts under step one of Alice regarding where abstract ideas end and patent eligible technological improvements begin.

Claim 1 of the ’090 Patent recites:

  1. A data delivery system for providing automatic delivery of multimedia data products from one or more multimedia data product providers, the system comprising:

a remote account transaction server for providing multimedia data products to an end user, at least one of the multimedia data products being specifically identified advertising data; and

a programmable local receiver unit for interfacing with the remote account transaction server to receive one or more of the multimedia data products and for processing and automatically recording the multimedia data products, said programmable local receiver unit including at least one individually controlled and reserved advertising data storage section adapted specifically for storing the specifically identified advertising data, said at least one advertising data storage section being monitored and controlled by said remote account transaction server and such that said specifically identified advertising data is delivered by said remote account transaction server and stored in said at least one individually controlled and reserved advertising data storage section.

Notably, under step one of Alice, Customedia had argued that by “providing a reserved and dedicated section of storage, the claimed invention improves the data delivery system’s ability to store advertising data, transfer data at improved speeds and efficiencies, and prevent system inoperability due to insufficient stores.”  Slip Op. at 7.  “In short, by dedicating a section of the computer’s memory to advertising data, the claimed invention ensures memory is available for at least some advertising data.”  Id.  But the Court explained that “[e]ven if we accept Customedia’s assertions, the claimed invention merely improves the abstract concept of delivering targeted advertising using a computer only as a tool.” Id.   The Court repeated throughout the opinion that patent-eligible improvements to computer functionality must be directed to an improvement in the functionality of the computer itself, not just any improvement.  Id. at 7, 8, 11.

The Court went on to explain that “improving a user’s experience while using a computer application is not, without more, sufficient to render the claims directed to an improvement in computer functionality.”  Id. at 10.  The Court analogized the claims at issue to those found ineligible in Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084 (Fed. Cir. 2019) and Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378 (Fed. Cir. 2019), and distinguished them from those found eligible in other user experience cases such as Data Engine Techs. LLC v. Google LLC, 906 F.3d 999 (Fed. Cir. 2018) and Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018).   Ultimately, the Court explained that the claims “merely recite reserving memory to ensure storage space is available for at least some advertising data,” and the only “improvements identified in the specification are generic speed and efficiency improvements inherent in applying the use of a computer to any task.”  Id. at 11.   Accordingly, the claims are directed to the abstract idea of using a computer to deliver targeted advertising, and at most improve the abstract concept of targeted advertising where a computer is merely used as a tool.  Id. at 6, 11.

Under step two of Alice, the Court found that the claim recites only generic computer components, including a programmable receiver unit, a storage device, a remote server, and a processor.  Id. at 12.

The Court’s step one analysis may be particularly helpful to defendants in further clarifying, or even narrowing, what constitutes patent-eligible technological improvements with respect to transmission of digital data.  For example, will this decision be extended to support patent-eligibility challenges of claims directed to purported improvements in storage, speed, and efficiency in the delivery of digital content more broadly, as opposed to just advertisements?  Stay tuned.