Federal Circuit Elaborates on Significance of Computer Hardware Elements to § 101 Analysis

In TLI Communications, LLC v. AV Automotive, L.L.C., No. 15-1372 (Fed. Cir. May 17, 2016), the Federal Circuit affirmed an order to dismiss, finding that the patent-in-suit is directed to an abstract idea and that generic steps for applying the abstract idea on a telephone network do not confer patent eligibility to the abstract idea.

TLI Communications sued the defendants for infringing its patent covering a method and system for taking, transmitting, and organizing digital images. The defendants moved to dismiss the complaint for failure to state a claim, arguing that the patent is drawn to patent-ineligible subject matter. The district court agreed, concluding that the claims are drawn to the abstract idea of taking, organizing, classifying, and storing photographs. In reaching its decision, the district court did not give the claims’ recitation of a telephone unit or a server, or a “means for allocating” limitation, any patentable weight.

On appeal, the Federal Circuit agreed with the district court’s application of the two-part test set forth in Alice Corp. v. CLS Bank International. The Court found the claims were directed to the use of conventional or generic technology in a well-known environment without indicating that the claims solved a problem presented by combining the two. Further, the patent only provided functional descriptions of the tangible components without any structure or details. Accordingly, the Court found that merely reciting the server and the phone did not confer patent eligibility to the abstract idea. Thus, the Court affirmed the district court’s dismissal of the complaint.

*Nathan I. North is a Summer Associate at Finnegan