By Peter Reap, J.D., LL.M.
Two patents asserted by JDS Technologies against defendant Exacq Technologies related to software used for video surveillance systems were not invalid under the test developed by the U.S. Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014), because they did not claim an abstract idea, the federal district court in Detroit has decided (JDS Technologies, Inc. v. Exacq Technologies, Inc., June 7, 2016, Cohn, A.). Thus, Exacq’s motion to dismiss JDS’s infringement suit on the grounds that the asserted claims in each patent are invalid under 35 U.S.C. §101 was denied.
The patents-in-suit, U.S. Patent Nos. 6,891,566 (“the ’566 patent”) and 8,185,964 (“the ’964 patent”), are identically titled “Digital Video System Using Networked Cameras” and relate to software used for video surveillance systems. According to JDS, the patents are directed at protecting against the unauthorized use of the video surveillance software, i.e. piracy, though the use of a Media Access Control (MAC) address, which is a unique address assigned to each computer.
Exacq disputed this characterization of the patented technology, contending that the patents never mention “unauthorized use” or piracy. Exacq instead argued that they are “directed to software that provides for the accessing and displaying of camera images.” Essentially, Exacq said that the patents claim nothing more than an abstract idea—monitoring images from multiple video cameras from a single location—and the use of the MAC addresses as part of the licensing process is not an inventive concept but simply a conventional step in computing.
In Alice, the Supreme Court employed a two-part test “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Id. at 2355. First, a court must determine “whether the claims at issue are directed at a patent-ineligible concept.” If the claims are so construed, the court must proceed to step two, which involves a determination as to whether the patent contains an “inventive concept,” which is described as “an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” Id.
Abstract idea. In Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co., 2014 WL 7215193 (D. Del. Dec. 18, 2014), a case cited by Exacq, the patent covered digital images like the JDS Patents, the court noted. The court held that none of the method claims at issue were necessarily tied to any particular structure. The claims recited “scanning” hard copy images, but only for the purpose of grouping the images by “categories.” Id. at *10. The court therefore concluded that such a grouping by category is certainly something that can be performed in the human mind and therefore the patent was abstract.
The JDS patents are different from the patent in Intellectual Ventures, according to the court. JDS was correct in saying that querying external camera devices to extract an embedded unique identifier (the MAC address) and then validating the unique identifier for software licensing purposes is not something a human mind is capable of doing. These steps are necessarily tied to the video devices being validated and system created by their addition. Here, up to the time of the invention, no one queried digital cameras and video servers for an embedded code (the MAC address) for the purpose of restricting access and protecting the software on a different device, the court noted. The technological solution presented is inexorably tied to computer technology and prevents abuse by controlling when and how external devices are allowed to operate within a video surveillance system. Thus, the JDS patents are not abstract, the court held.
Although Exacq argued that the “principle” of the patents-in-suit is “as old as video surveillance itself,” it did not address the claim language whatsoever. It also did not address access control features, i.e. the use of the MAC address, that are rooted in computer technology in order to overcome a problem that specifically arose with the growth of IP camera technology. The claims of the ’566 Patent are directed to a video surveillance system, complete with computers, a network, and a plurality of video servers and cameras. These are particular machines, not generic computers. The claims do not embody a mental process or an abstract idea, the court determined.
Recent authority supported this conclusion. In Enfish, LLC v. Microsoft Corp., No. 2015-1244, 2016 WL 2756255 (Fed. Cir. May 12, 2016), the Federal Circuit applied—and clarified—the first step of the Alice analysis, the court observed. There the Federal Circuit made clear that not all claims directed to software are per se abstract ideas under step one of the Alice analysis and explained that a claim is patentable under 35 U.S.C. §101—in accordance with step one of Alice—when it is “directed to a specific implementation of a solution to a problem in the software arts.”
Application of step one of the Alice analysis to claim 1 of the ’566 Patent resulted in a finding that the claimed subject matter is not abstract. Therefore, the JDS patents are not invalid under Section 101, the court concluded.
Inventive concept. Because the JDS patents are not abstract, it was not necessary to consider step two. The court merely commented that Exacq’s arguments as to an inventive concept appeared more appropriately directed to an obviousness challenge.
The case is No. 2:15-cv-10387-AC-EAS.
Attorneys: Jonathan D. Nikkila (Brooks Kushman PC) for JDS Technologies, Inc. Steven C. Susser (Carlson Gaskey & Olds PC) for Exacq Technologies, Inc.
Companies: JDS Technologies, Inc.; Exacq Technologies, Inc.
MainStory: TopStory Patent MichiganNews
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