Argument Recap

In February, the Federal Circuit heard oral argument in Realtime Data LLC v. Array Networks Inc., a patent case. In this case, the Federal Circuit is reviewing a determination by a district court that Realtime’s patents are directed to an abstract idea and lack inventive concept and are thus invalid under 35 U.S.C. § 101. The panel hearing the oral argument included Judges Newman, Reyna, and Taranto. This is our argument recap.

Brian Ledahl argued for Realtime. He began by arguing that the patent claims at issue claim technological solutions to technological problems and they are not abstract for that very reason. One judge asked why the claimed invention is not abstract. Ledahl responded that characterizing the invention as manipulation of data using compression is an oversimplification because it improves the functionality of a computer system “tremendously” and the claimed method looks at the content of the data. Ledahl also asserted the district court characterized all 211 patents in one respect, data compression, which was an oversimplification of the claims.

Judge Reyna suggested Realtime needs to focus on the “how” if it wants to prove the claims are not abstract. Ledahl responded by arguing that the use of different encoders uses compression in different ways, and, he argued, the claimed invention uses a mixed type of compression to optimize speed, which is novel. Moreover, he asserted, the technological problem here is not simply moving data but rather providing new ways to use compression to make systems better.

Finally, one judge asked what the parameters and attributes of the data are. Ledahl responded that the patents address repetition, redundancy, long strings of common characters, data block formats, and file types in order to ascertain which encoder would be best.

John Neukom argued for Array. He began by arguing that the question of specificity has been crucial to the scope of claims in previous cases. Neukom then argued that every time the patent discussed an encoder or decoder, the patentee was talking about techniques known in the art. He argued the claims in the present case have no bounds nor specificity regarding their attributes and parameters. Moreover, he stressed, there are no partial negative limitations in Realtime’s patents.

One judge then asked about a prior case and its relationship to this case. Neukom responded that the court in the prior case did not have the benefit of looking for specificity as highlighted in important precedential cases. He then argued that Realtime’s attempt to add a limitation to its patent cannot save it because that limitation does not add anything that is not abstract.

During Ledahl’s rebuttal, he asserted the district court conceded it was not looking at the technological problem of the data compression, which is required under the eligibility analysis. Moreover, he argued, the claims Neukom referenced did not recite how the clams were better. In contrast, he contended, the present claims point to how they make data compressing better.

We will continue monitoring this case and report on any developments.