FREE STREAM MEDIA CORP. v. ALPHONSO INC.

Before Judges Dyk, Reyna, and Hughes. Appeal from the United States District Court for the Northern District of California

Summary: Patent claims were directed to an abstract idea where the claims failed to recite any structure or concrete actions for achieving the claimed advance and the claimed advance did not the improve the operability of computing devices.

Free Stream Media Corp. sued Alphonso Inc. for patent infringement. Alphonso filed a motion to dismiss, arguing that certain asserted claims are patent ineligible under § 101 because they are directed to the abstract idea of tailored advertising. Free Stream disagreed, characterizing the claims as directed to a specific improvement, namely delivering relevant content (e.g., targeted advertising) from one device to a second device through a “security sandbox,” a security mechanism constraining the actions that applications on a device may take. The district court rejected Alphonso’s argument and denied its motion to dismiss, finding at step one of the Alice test that the asserted claims are not directed to an abstract idea. Free Stream appealed certain other issues to the Federal Circuit and Alphonso cross-appealed the denial of its motion to dismiss.

The Federal Circuit reversed the district court’s denial of Alphonso’s motion to dismiss and held the claims patent-ineligible. At step one of the Alice test, the Federal Circuit held the claims directed to an abstract idea. The Federal Circuit provided two rationales for this. First, the Federal Circuit found that the claims recite a functional result (i.e., passing relevant information through the security sandbox) amounting to a technological improvement in the abstract without reciting any concrete structures or actions that would achieve the functional result. Second, the Federal Circuit found that Free Stream had not explained how its alleged claimed advance made any improvement to computer technology beyond providing a user with targeted content using generic processes and machinery. In the Federal Circuit’s view, the alleged technological advance merely used a computer as a tool to achieve the abstract idea of providing targeted advertising to a mobile device user. At step two of the Alice test, the Federal Circuit held that the asserted claims fail to recite an inventive concept. The Federal Circuit found that the claims simply recite the use of generic features and routine functions to implement the underlying idea of bypassing a security sandbox and providing targeted content to a client device.

Editor: Paul Stewart

Written by: Mack Montgomery & Karen Cassidy