Claims to a Spread-Spectrum Method For Sending Data Over a Communications Channel Are Patent Ineligible under Section 101

August 23, 2021

Plaintiff Zyrcuits IP LLC has sued Defendants Acuity Brands, Inc. and Universal Electronics Inc. for infringement of claim 4 of U.S. Patent No. 6,671,307 (the ‘307 patent). Defendants argued that Zyrcuits’s complaints should be dismissed because the ‘307 patent is invalid under 35 U.S.C. § 101 for failing to claim patentable subject matter. Applying the two-step framework from Alice, the court found that the ‘307 patent was invalid under § 101, as the claims of the ‘307 patent are directed to the abstract idea of grouping data together with a single code and do not contain any inventive concept.
The ‘307 patent describes applying signal codes to blocks of interleaved data for spread-spectrum transmission. According to the written description, spread-spectrum transmission was previously accomplished using parallel codes. Zyrcuits alleged that Acuity and Universal Electronics infringe claim 4 of the ‘307 patent.
Claim 4 recites a spread-spectrum method improvement for sending data over a communications channel, comprising the steps of:
storing, at a transmitter, N bits of interleaved data as stored data, with N a number of bits in a symbol;
selecting, at said transmitter in response to the N bits of stored data, a chip-sequence signal from a plurality of 2N chip-sequence signals, as an output chip-sequence signal; and
transmitting, at said transmitter, the output chip-sequence signal as a radio wave, at a carrier frequency, over said communications channel, as a spread-spectrum signal.
The court noted that claim 4 described grouping together data that may come from multiple sources, applying a single chip-sequence code to the grouped data, and then transmitting the code by radio wave. Under Alice Step One, whether the claims are drawn to patent ineligible subject matter, the court found that the ‘307 patent was directed to the abstract idea of grouping spread-spectrum data together with a single code instead of with parallel codes. The court explained that the Federal Circuit had indicated repeatedly that claims directed to the manipulation of data are abstract absent additional features, because “information as such is an intangible.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). 
The court pointed out that representative claim 4 was directed to the manipulation of information: “It requires ‘storing’ specified data, ‘selecting’ a signal based on the stored data, and then ‘transmitting’ the signal” and that “Zyrcuits repeatedly referred to the content of claim 4 as an ‘algorithm.’” “A process that start[s] with data, add[s] an algorithm, and end[s] with a new form of data [is] directed to an abstract idea.” RecogniCorp, LLC v. Nintendo Co., Ltd., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (citing Digitech Image Techs., LLC v. Elecs.for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014)). “This is exactly what is recited in claim 4.”
Zyrcuits argued that claim 4 recited a technical solution to the problem of spread-spectrum signal transmission without using parallel codes. According to Zyrcuits, the ‘307 patent teaches “particular techniques-with limiting detail-to solve the problem of transmitting spread-spectrum signals without using parallel codes.” The court pointed out that claims directed to forms of data collection and manipulation are not directed to an abstract idea if they offer technical improvements to computer technology. Compare Smart Sys. Innovations, LLC v. Chi. Transit Auth., 873 F.3d 1364, 1372 (Fed. Cir. 2017) (“We have determined that claims directed to the collection, storage, and recognition of data are directed to an abstract idea.”); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016) (finding claims subject-matter eligible when directed to the “improvement to computer functionality itself”). Zycruits relied on the Enfish line of cases to argue that the ‘307 patent is subject-matter eligible since, according to Zyrcuits, it describes specific techniques with limiting detail. 
However, the court pointed out that claim 4 did not provide a technical solution to a technical problem and that Zyrcuits failed to identify in its briefing any particular technical solution disclosed in the ‘307 patent.  According to the court, Zyrcuits pointed to unexplained block quotes from the patent and the unsupported, conclusory statement in the complaints that claim 4 addressed the problem of interference and output signal distortion with a technical solution. The court noted that the step of storing “‘N bits of interleaved data as stored data, with N a number of bits in a symbol’ could simply be summarized as ‘storing data as stored data.’ The selection step teaches ‘selecting ... a chip-sequence signal from a plurality of 2N chip-sequence signals,’ but provides no details about how this selection should be made.” The court further noted that the third step required nothing more than “transmitting ... the output chip-sequence signal as a radio wave, at a carrier frequency, over said communications channel, as a spread-spectrum signal, which is transmitting data in a known way.” The “how” information Zyrcuits pointed to only confirms that the storing, selecting, and transmitting steps are exactly what they first appear to be, i.e., the abstract manipulation of information. “Claim 4 may use technical jargon, but that does not mean it teaches a technical solution.”  The court noted that it might be true that the patent is directed to a useful idea, but a patent is still invalid for lack of subject-matter eligibility when it teaches a useful abstract idea. “The fact that an [idea] can be used to make a process more efficient, however, does not necessarily render an abstract idea less abstract.” See Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 910 (Fed. Cir. 2017).
The court concluded that under Step One of Alice, “representative claim 4 is directed to the idea of applying a signal code to a block of interleaved data (thereby avoiding parallel codes), and the claim does not provide any guidance on how to accomplish this idea. Therefore the ‘307 patent is directed to an abstract idea.”
The court then proceeded to determine whether the claims contain an “inventive concept” “sufficient to transform the claimed abstract idea into a patent-eligible application” under Alice and Mayo.  The court stated that it was insufficient for the patent to “simply state the law of nature while adding the words ‘apply it’” citing Mayo v. Prometheus, 566 U.S. 66, 72 (2012),  and noted that a claim directed towards an abstract idea must include “‘additional features’ to ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]’” citing Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208, 216, 221 (2014). “No such additional features exist here, and I find that, whether considered individually or as an ordered combination, the claim elements of the 307 patent do not ‘transform’ the claimed abstract idea into patent-eligible subject matter.” According to the court, claim 4 “simply takes an abstract idea for transmitting data and implements it ‘at a transmitter’ as a ‘radio wave’ over a ‘communications channel’” and the invocation of generic communication technology does not provide an inventive concept.

Zyrcuits argued that there was a disputed factual issue about whether claim 4 recites “well-understood, routine, and conventional activities.”  In response, the court explained that “Zyrcuits cannot artificially create a dispute of fact by making the conclusory allegation that ‘claim 4 embodies an inventive concept,’ . . . when the #307 patent itself resolves any possible factual issues.” The court pointed to Figures 1 and 2 of the patent that show a prior art system that includes a generic transmitter and a communication channel. The patent also explains that the claimed process can be implemented on a “general purpose processor.”  “Implementing an abstract idea on a general purpose processor or a generic transmitter does not constitute an inventive step. Alice, 573 U.S. at 222.”
Zyrcuits further asserted that the claimed process was unconventional. The court disagreed because “the alleged unconventional process is the abstract idea to which claim 4 is directed, and the abstract idea itself cannot provide the inventive feature required at step two.” The court noted that the expert declaration submitted by Zyrcuits in opposition to the pending motion confirms this conclusion. The inventive concept identified by the expert, the method for spread-spectrum data transmission without parallel codes, is the abstract idea to which claim 4 is directed. “The patent lacks any additional features that would make the claims eligible under § 101, because it simply applies an abstract idea using conventional technology.”
The court found find that the ‘307 patent was invalid under § 101 for lack of subject-matter eligibility and granted the defendants’ motion to dismiss.
Zyrcuits IP LLC v. Acuity Brands, Inc., No. CV 20-1306-CFC, 2021 WL 3287801, at *1 (D. Del. Aug. 2, 2021);