Federal Circuit Decision

Broadsoft, Inc. v. Callwave Communications, LLC, No. 2018-1124, 2018 WL 4999375, at *1 (Fed. Cir. Oct. 16, 2018) (per curiam) (affirming district court’s order finding claims invalid)

District Court Decision

Broadsoft, Inc. v. Callwave Commc’ns, LLC, 282 F. Supp. 3d 771 (D. Del. 2017)

Federal Circuit Affirms Decision Finding Telephone Dialing Claims IneligibleAdd internet telephony systems to the list of computer-related technologies considered for patent eligibility under 35 U.S.C. § 101. Under current law, among other requirements, in order to qualify as patent-eligible under § 101, a patent claim involving computer-related technology must be directed to something more than simply an abstract idea that fails to implement an inventive concept. A patent’s claims will fail this test if a court finds that they are simply directed to “method[s] of organizing human activity” or “a known idea” that “is routine and conventional.”

In Broadsoft, Inc. v. Callwave Communications, LLC, a three-judge Federal Circuit panel issued a per-curiam decision affirming the United States District Court for the District of Delaware’s grant of a motion for judgment on the pleadings as to patent ineligibility under 35 U.S.C. § 101. The trial court’s order examined claims in two patents assigned to Callwave Communications, U.S. Patent Nos. 8,351,591 and 7,822,188. The trial court found that the claims covered telephony methods involving conventional elements and lacking an inventive concept.

The Asserted Patents

The ’591 and ’188 patents have common specifications and are directed to techniques for placing internet telephone calls. The patents had two general types of claims: sequential dialing claims and single number outcall claims. Claim 40 of the ’188 patent was selected as an exemplary “sequential dialing” claim:

40. A method of processing calls, comprising:

receiving at a call processing system a message from an Internet protocol proxy regarding a first call from a caller;

determining if the first call is directed to a telephone address of a subscriber of services offered by the call processing system, wherein at least partly in response to determining that the telephone address is that of a subscriber:

accessing an account record associated with the subscriber, the account record including at least one subscriber instruction;

based at least in part on the subscriber instruction, placing a first outcall to a first communication device associated with the subscriber;

if the first outcall is not answered within a first number of rings or period of time, placing a second outcall to a second communication device associated with the subscriber; and [sic]

receiving a call connect instruction from the subscriber; and

instructing the call processing system to connect the first call to a third communication device.

Claim 1 of the ’591 Patent was selected as an exemplary “single number outcall” claim:

1. A method of processing calls, the method comprising:

storing in computer readable memory associated with a call processing system a first phone address associated with a first subscriber;

storing in computer readable memory a plurality of phone addresses for the first subscriber;

participating at the call processing system in a first call associated with the first subscriber, the first call associated with a second phone address different than the first phone address;

placing a first outcall from the call processing system to a first called party, wherein the call processing system inserts at least a portion of the first phone address in a callerlD field associated with signaling information associated with the first outcall;

causing the first call and the first outcall to be bridged;

participating at the call processing system in a second call associated with the first subscriber, the second call involving a subscriber communication device associated with a third phone address different than the first phone address;

placing a second outcall from the call processing system to a second called party, wherein the call processing system inserts at least a portion of the first phone address in a callerlD field associated with signaling information associated with the second outcall; and

causing the second call and the second outcall to be bridged.

The District Court Proceedings

Broadsoft filed a declaratory judgment action in the United States District Court for the District of Delaware seeking declaratory judgment that claims in Callwave’s patents were invalid. Callwave’s patents came under attack from Broadsoft after Callwave asserted those patents against Telovations, Inc., which had licensed accused software products from Broadsoft, and Bright House Networks, LLC, which had acquired Telovations. The software license agreement between Broadsoft and Telovations specified that Broadsoft owed an obligation to defend Telovations against patent infringement claims based on the software.

Broadsoft submitted motions seeking judgments that Callwave’s ’591 and ’188 patents were directed to patent ineligible subject matter under § 101. The motions also argued that the patents were invalid as anticipated under § 102 and obvious under 35 U.S.C. § 103.

Sequential Dialing Claims

Broadsoft argued that the idea of sequentially dialing a list of telephone numbers is an abstract idea that fails to provide any improvement to computer or technological processes. According to Broadsoft, the claims simply identify steps that automate the task of accessing a list of telephone numbers and sequentially dialing them, a task previously performed manually by a human. Callwave countered that the claims allow a call to be redirected without hanging up and redialing, a process impossible for a human operator who does not know any additional phone numbers for the party being called.

The court agreed with Broadsoft’s arguments, and found the sequential dialing claims were directed to an abstract idea. The court noted that the problem of callers receiving busy signals or being sent to voicemail rather than reaching the called party was a “human unavailability problem” that was not specific to telephone technology.

Broadsoft also argued that the sequential dialing claims lacked an inventive concept, partly because they simply use computer telephony to implement the idea of sequential dialing, and because no inventive concept is conveyed in claims that narrow an abstract idea to a particular technological application. Callwave cited McRo, Inc. v. Bandai Namco Games America, Inc., and argued that its claims did identify an inventive concept, focusing on three limitations addressing: 1) internet protocol proxy messaging for receiving or placing calls, 2) use of timing or number of rings to determine when to place a second call, and 3) use of a hybrid network to handle calls from different interfaces by converting call protocols.

The court found that none of the limitations Callwave identified represented an inventive concept. The court noted that the patent intended to solve the problem of calls ending in busy signals or voicemails, and failed to identify a technological solution for network interoperability, describing its call processing elements as “standard.” Use of timing rules to determine when to place a second call similarly failed to constitute an inventive concept because “there is nothing inventive about using a preset amount of time to determine when to initiate a particular step in a process, and it is difficult to imagine using in this system alternative rules not based on the passage of some period of time.” Unlike the decision in McRo, the sequential dialing claims did not require that the rules be obtained first. The patent lacked discussion about protocol conversion, leading the court to conclude that the process was just “routine.”

Single Number Outcall Claims

The single number outcall claims similarly identified an abstract idea and failed to include an inventive concept. The court found that exemplary claim 1 was essentially “directed to storing data in a database, looking up data from that database in response to the initiation of a phone call, and inserting at least a portion of that data in the already-existing callerID field,” and concluded that the “problem of being unable to reach a particular individual is a practical, human unavailability problem, not a technological one.” The court also noted that the claims could be practiced in an office setting by a human assistant. The court found no improvement to telephony technology or solution to a specific phone problem.

The court also agreed with Broadsoft regarding the lack of an inventive concept, stating that the call processing techniques of the claims were not directed to solving network interoperability problems, and that the patents “simply append[ ] conventional steps, specified at a high level of generality, [which is] not enough to supply an inventive concept.”

The Federal Circuit’s Decision

The Federal Circuit panel’s per curiam affirmance leaves Callwave with the option to request rehearing by the panel or the Federal Circuit as a whole en banc. Callwave has 30 days from the date of the opinion, or until November 16, 2018, to submit a petition for rehearing by the panel or rehearing en banc.

Impact on Current Law

The trial court’s decision occurred before Berkheimer v. HP, Inc., which generally states that factual issues may prevent a grant of judgment on the pleadings as to patent eligibility under § 101. But the Federal Circuit’s post-Berkheimer affirmance here indicates its agreement with the trial court’s conclusion that no such factual issues existed. Notably, the trial court’s decision finds absence of any factual issues as to whether an Internet Protocol proxy server, Session Internet Protocol proxy and computer telephony system are “conventional” elements. The trial court also determined that the problem the claims attempt to solve is that of a caller having to hang up and redial a new number if they get a busy signal or reach voicemail, which the court found is a “human unavailability problem,” not a technical one. Without contradictory evidence to consider, a court may find a lack of factual issues as to patent eligibility when the patent’s specification describes technology as “standard” or “conventional” and the claims identify a problem that can be solved by adding a human actor.