In Cooperative Entertainment, Inc. v. Kollective Technology, Inc.,1 the Federal Circuit held that useful improvements to computer networks can be patent eligible even when standard computing equipment is used. In addition, assertions by a patent owner in a complaint that the inventive concept included a specific network structure for sharing content through a dynamic peer-to-peer (P2P) network were sufficient to prevent dismissal of the case for lack of patent eligibility.
Cooperative Entertainment, Inc. (Cooperative) owned U.S. Patent No. 9,432,452 (’452 patent), directed to configuring a peer-to-peer (P2P) dynamic network for transmitting large files, such as videos and video games, where the distribution of content is performed outside of content distribution networks (CDNs), i.e., outside of a static network of controlled systems. Dynamic P2P networks with peer nodes that process the same content concurrently were used to send the content to each other as an alternative to receiving the content from the CDN.
To enable the distribution of content, the claimed P2P networks utilized content segmentation to divide the content into smaller clips and gradually distribute them. Consequently, viewers could receive segments as desired, ideally from other viewers.
Claim 1 recited:
1. A system for virtualized computing peer-based content sharing comprising:
at least one content delivery server computer constructed and configured for electrical connection and communication via at least one communications network; and
at least one peer-to-peer (P2P) dynamic network including a multiplicity of peer nodes, wherein the multiplicity of peer nodes consume the same content within a predetermined time, wherein the multiplicity of peer nodes are constructed and configured for electronic communication over the at least one P2P dynamic network, wherein the at least one P2P dynamic network is based on at least one trace route; wherein the multiplicity of peer nodes is distributed outside controlled networks and/or content distribution networks (CDNs) that are included within the at least one communications network;
wherein the at least one content delivery server computer is operable to store viewer information, check content request, use the trace route to segment requested content, find peers, and return client-block pairs;
wherein distribution of P2P content delivery over the at least one P2P dynamic network is based on content segmentation;
wherein content segmentation is based on CDN address resolution, trace route to CDN and P2P server manager, dynamic feedback from peers reporting traffic rates between individual peer and its neighbors, round-robin and other server side scheduling/resource allocation techniques.2
Cooperative sued Kollective Technology, Inc. (Kollective), for infringing the ’452 patent. Kollective filed a motion to dismiss asserting the ’452 patent claims were not patent eligible under 35 U.S.C. § 101. The district court granted Kollective’s motion. Cooperative appealed and the Federal Circuit reversed.
The court laid out its eligibility analysis:
To determine patent eligibility, we apply the Supreme Court’s two-step Alice framework. . . . At step one, we determine whether the claim is directed to a “patent-ineligible concept,” such as an abstract idea. . . . If it is, at step two we examine 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. . . . Specifically, we determine 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.3
The court observed that the claims recited inventive concepts not restricted to the abstract idea, which overcame Kollective’s motion to dismiss. Cooperative asserted on appeal to prevent dismissal that it credibly asserted that the ’452 patent claims recited inventive concepts. The court agreed, noting that claim 1 recited several inventive concepts that the specification emphasized as particular improvements for distributing data, which should have overcome Kollective’s motion to dismiss. Specifically, the court held:
There are at least two alleged inventive concepts in claim 1 which should have precluded the district court’s holding on ineligibility. The first is the required dynamic P2P network wherein multiple peer nodes consume the same content and are configured to communicate outside the CDNs. . . . The second requires trace routes be used in content segmentation. . . . Because Cooperative plausibly alleged that both of these concepts were inventive, we reverse the district court’s dismissal.4
The court explained that the claimed system included at least one P2P dynamic network and one content delivery server. The dynamic P2P network had at least one trace route and a multiplicity of peer nodes. The peer nodes were disseminated separate from controlled distribution networks (CDNs). “It is this specific network structure required by claim 1 that Cooperative alleges to be inventive,” the court reasoned.5
The court noted that the specification described how claim 1’s dynamic P2P network configuration was superior to the prior art: Arranging peer nodes based on their concurrent processing of common video content enabled smooth replay and circumvented delays and stuttering or buffering difficulties.6
In addition, the court also reasoned that the amended complaint repeated the advantages of claim 1’s innovative technique of a dynamic P2P network that distributed content outside the control of a CDN. Specifically, the amended complaint alleged:
The benefit of this “bottom up” approach is manifold and generally directed to addressing the capacity problem. If control is passed to the P2P dynamic network, then capacity may be substantially addressed—and in some cases exclusively addressed—by the P2P dynamic network. In other words, the computing capacity of the client devices consuming the video content is leveraged and used to the maximum extent.7
Drawing all interpretations for the benefit of Cooperative, the Federal Circuit determined that claim 1 recited a precise technical solution that was an inventive concept: i.e., the specific configuration of peer nodes for transmitting content outside controlled networks, which did not exist in the prior art.8 The court viewed the assertions in the complaint as producing credible facts concerning the inventiveness of the dynamic P2P configuration recited in claim 1. According to the court:
Claim 1 recites a specific network structure, the patent’s written description explains how it is arranged, and the written description and amended complaint explain the alleged benefits of sharing content using a P2P network outside the control of a CDN using peer nodes. Determining whether the claimed network is well-understood, routine, or conventional is a question of fact that cannot be resolved at the Rule 12(b)(6) stage, and the district court erred in resolving this factual issue against Cooperative.9
The court also disagreed with the district court’s conclusion that Cooperative did not credibly contend that segmenting content based on trace routes was inventive.10
Kollective did not dispute that segmenting content using trace routes was inventive—just that it was not required and therefore immaterial to patent eligibility. The Federal Circuit court disagreed.
For example, the court explained, claim 1 recited that distribution of the content must transpire using content segmentation. In addition, claim 1 stated the content segmentation was achieved using trace routes to CDNs and a P2P server manager. Further, the specification described segmenting using trace routes as one reason for enabling the distribution of the P2P content delivery. The specification also described that segmenting content based on trace routes was advantageous over the prior art.
Cooperative’s amended complaint also asserted that employing trace routes to segment content was not well understood, routine or conventional, and that it enabled further segmenting of the specific content being distributed. These assertions in the complaint that using trace routes in segmenting content was inventive and improved efficiency were the same as the statements in the prosecution history and the patent specification. According to the court:
Cooperative’s allegations that claim 1’s use of trace route segmentation is an inventive concept are sufficient to preclude dismissal at the Rule 12 stage. Kollective argues only that the ’452 patent does not claim anything inventive because P2P networks and CDNs are conventional. . . . This argument misses the point—useful improvements to computer networks are patentable regardless of whether the network is comprised of standard computing equipment. . . . And, notably, Kollective does not argue that the use of trace routes to segment content in claim 1’s dynamic P2P network structure is not inventive. . . . The record here contains concrete allegations in the complaint and the specification that the segmentation limitation was not well-understood, routine, or conventional and “recit[es] a specific technique for improving computer network” functioning.11
The court therefore held:
In sum, the district court erred in dismissing the complaint. The claim language, the written description, and the amended complaint “describe[ ] how [the ’452 patent’s] particular arrangements of elements is a technical improvement over prior art ways of” arranging networks for distributing video content.12
The court therefore held Cooperative provided credible factual contentions that the claims included inventive concepts to preclude dismissal, and it reversed the district court.
Lessons
In Cooperative Entertainment, Inc. v. Kollective Technology, Inc., the Federal Circuit provided new guidance for patent owners and patent litigators drafting complaints. Specifically, complaints should be drafted to include a description of an inventive concept with specific facts that may come from the specification, prosecution and expert opinion.
Patent claims that describe a specific way to solve a technical problem will generally stand up better to invalidity attacks based on patent-eligible subject matter. In addition, claims that provide specific solutions that improve the prior art are more likely to defeat a patent eligibility motion.
This decision also suggests that asserting a variety of claims highlighting different technical problems or technical improvements can be beneficial. Further, when multiple patents are being asserted, even if the patents share part or all of a specification, each claim should be separately analyzed. Thus, inventors, patent owners and patent application drafters should consider adapting the patent specification and claims in the future to maximize the ability to take advantage of this decision.
Irah Donner is a partner in Manatt’s Intellectual Property practice and is the author of Patent Prosecution: Law, Practice, and Procedure, 2022 Edition, and Constructing and Deconstructing Patents, Second Edition, both published by Bloomberg Law.
1 Coop. Entm’t, Inc. v. Kollective Tech., Inc., 50 F.4th 127, 2022 USPQ2d 883, 2022 WL 4488902 (Fed. Cir. 2022).
2 Id., 50 F.4th at ----.
3 Id., 50 F.4th at 130 (quoting Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 221, 134 S.Ct. 2347, 2357 (2014); and Content Extraction & Transmission LLC v. Wells Fargo Bank, Natl Ass’n, 776 F.3d 1343, 1347–48, 113 USPQ2d 1354, 1358 (Fed. Cir. 2014)) (citations omitted).
4 Id., 50 F.4th at 131 (citations omitted).
5 Id., 50 F.4th at 132.
6 Id., 50 F.4th at 132.
7 Id., 50 F.4th at 132 (citing amended complaint).
8 Id., 50 F.4th at 133.
9 Id., 50 F.4th at 133.
10 Id., 50 F.4th at 133.
11 Id., 50 F.4th at 135 (quoting SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1304 (Fed. Cir. 2019)) (citations omitted).
12 Id., 50 F.4th at 135 (quoting BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350, 119 USPQ2d 1236, 1243 (Fed. Cir. 2016)).