Two-Way Media v. Comcast: Federal Circuit Affirms Two-Way Media’s Internet Multicasting Claims Are Patent Ineligible

Two-Way Media Ltd v. Comcast Cable Communs., LLC, Nos. 2016-2531, 2016-2532, 2017 U.S. App. LEXIS 21706 (Fed. Cir. Nov. 1, 2017).

The Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware, which held that Two-Way Media’s asserted patents regarding Internet multicasting were patent ineligible under The Patent Act, 35 U.S.C. § 101.

To address the eligibility of the four patents in question, the district court applied the two-step test supplied by Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Under the Alice framework, the court first determines whether the claims at issue direct to certain judicial exceptions to 35 U.S.C. §101, which include laws of nature, natural phenomena, and abstract ideas. If so, the court then applies step two to see if there is an “inventive concept” in the claim that can "transform the nature of the claim into a patent-eligible application." The district court found the four patents ( ’187 patent, ’005 patent, ’622 patent, and ’686 patent) ineligible under 35 U.S.C. §101 because they direct to abstract ideas and do not contain a “saving inventive concept.”

The Federal Circuit reviewed this determination de novo by re-applying the Alice two-step framework, and affirmed the district court’s decision. Under the Alice step one analysis, the court determined that the four patents direct to abstract ideas: the ’187 and ’005 patents to the concept of sending and monitoring the delivery of audio/visual information, the ’622 patent to the idea of monitoring the delivery of real-time information to users, and the ’686 patent to the idea of measuring the delivery of real-time information for commercial purposes. The court then proceeded to Alice step two to see whether the claims of the patents have additional elements that transform the nature of the claims to make them patent-eligible. The court held that all four patents lack inventive concepts: though the specifications purport innovative features, neither the claims nor their constructions require anything other than conventional computer and network components operating according to their ordinary functions.

Michael Borella of Patent Docs points out that the Federal Circuit’s “schizophrenic” nature in applying the Alice test makes it hard to determine whether a set of claims will be found patent-eligible under 35 U.S.C. § 101. Robert Schaffer and Joseph Robinson of IPWatchdog state that the Federal Circuit’s ruling means any inventive concept of a patent must be shown in the claim, not just in the specifications portion of the patent, in order to survive the Alice test.

Carl Min is a 1L student at Harvard Law School.