Every day, millions of people are subjected to a frustrating experience -- finding a place to park their automobiles.  Whether at the train station, the sports stadium, a festival, or a popular restaurant, circulating through parking lots is not an enjoyable way to spend either your work day or leisure time.  The fundamental issue is that a driver has no idea of parking lot occupancy beyond what he or she can see.  Thus, instead of making a beeline to the nearest open spot, the driver is forced (along with other drivers) to seek out such a spot in semi-random fashion.  Locating parking boils down to a classic resource scheduling problem -- but it is one that technology can solve.

The Invention and the Dispute

U.S. Patent Nos. 6,501,391 and 6,750,786 disclose such a solution.  Particularly:

A portable wireless remote graphical display device structured and arranged to access the Internet from home, office, vehicle, or any other location comprising a specific software application on the portable wireless remote graphical display device for commanding a server at a parking lot or remote location to transmit parking lot occupancy data corresponding to one or more parking lots over the Internet to the portable wireless remote graphical display device and for receiving and displaying the parking lot occupancy data on the portable wireless remote graphical display device as a real-time representation of the parking lot indicating vacant parking spaces within the parking lot.

Both were filed in 1999, well before smartphones with GPS, or the parking spot location / reservation apps that we enjoy today.

In late 2015, patent owner Open Parking brought an infringement action against Parkme in the Western District of Pennsylvania.  Parkme responded by contending that both patents were directed to ineligible subject matter under 35 U.S.C. § 101, and filed a 12(b)(6) motion to dismiss for failure to state a claim on which relief can be granted.

Claim 1 of the '786 patent was deemed representative.  It recites:

A parking system comprising:
    a wireless communications device capable of accessing the Internet; and
    a software application for receiving parking data transmitted over the Internet to the wireless communications device,
    wherein the parking data can be rendered by the wireless communications device as a substantially real-time representation indicating an occupancy condition of an available parking lot, and
    the occupancy condition changes according to presence and absence of vacant parking spaces within the available parking lot.

Under § 101, patent claims can be invalidated if they fail to meet the eligibility requirements set forth by the Supreme Court in Alice Corp. v. CLS Bank Int'l.  Of notable importance is the two-prong test provided therein.  First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exception.  Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."

Prong One of Alice

After a discussion of whether claim construction was necessary in order to evaluate the claims under § 101 (it wasn't), the Court applied prong one of the Alice test.  In doing so, it discussed two recent Federal Circuit § 101 cases:  Enfish, LLC v. Microsoft Corp. and TLI Communications LLC v. AV Automotive, L.L.C.

Quoting the former, the Court noted that "a relevant inquiry at step one is to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea."  Particularly, the invention in Enfish was directed to "an innovative logical model for a computer database, i.e., a model of data for a computer database explaining how the various elements of information are related to one another," thus providing a "specific improvement in the way computers operate."

On the other hand, the Court observed that the invention in TLI was "directed to the abstract idea of classifying and storing digital images in an organized manner and failed to add an inventive concept sufficient to confer patent eligibility."  This invention was abstract "despite requiring tangible components such as a telephone unit and a server," because these "physical devices merely provided a generic environment in which to carry out the abstract idea."

A distinction between Enfish and TLI, not made by the Court but worth keeping in mind, is whether the claimed invention involves a technological improvement or uses existing technology.  Enfish's improved database format is a new technological tool that can be used by any number of higher-level software applications.  In contrast, TLI's image classification and storage technique required the use of technological tools (e.g., the telephone unit and server), but in the view of the Federal Circuit, did not create or improve on any such technologies.

A similar distinction can be made between a previous pair of Federal Circuit cases.  In Ultramercial v. Hulu, claims directed to making online users watch an ad before being able to watch a video of their choosing was deemed ineligible under § 101.  In DDR Holdings v. Hotels.com, claims directed to changing how a web server operates so that it can incorporate visual aspects of two different web sites was found to satisfy the requirements of § 101.  Again, the difference between these two cases is that Ultramercial merely made use of existing technology (e.g., servers and the Internet), whereas DDR improved the operation of a specific technology.

When viewed in this fashion, these four cases provide a distinction between eligible and ineligible claims.  While this distinction is certainly debatable (and there are those who would argue that the inventions of all four cases should have been eligible or ineligible), the Federal Circuit has provided us with a rough roadmap to patent-eligibility post-Alice.  But as we will see, this roadmap is still fraught with hazard.

The Court considered the arguments of the parties.  Parkme contended that the claims amounted to no more than an abstract idea for "shuffling data from one place to another . . . that could be completed with pencil and paper."  Open Parking countered that the claims recited "a new and useful result of allowing a commuter to use an open parking mobile app on a smartphone to remotely view a changing occupancy condition of a parking lot when commuting and before arrival so that the commuter can readily locate an available parking space or decide to search for parking elsewhere."

The Court noted that "the 'pen and paper' test is a valid method to evaluate abstraction," as method steps that can be performed in the human mind or with pen and paper are usually a hallmark of an abstract idea.  While the Court concluded that "the rendering of the parking lot occupancy [in] 'substantially real time' could not be performed by a parking lot attendant handing out maps," but "the 'occupancy condition' of a parking lot, i.e. data about whether there are any open spots, could be rendered by humans using a pen and paper."

Here, the Court, probably prompted by Parkme, undertook some rather detailed speculation:

Perhaps there is an attendant at the gate who looks around the lot and writes the number of open spaces on a chalkboard for passersby to see.  Or there could be a simple "vacancy/no vacancy" sign outside of a lot, or a "real time" electronic sign showing the then-existing number of open spaces, based on the entry/exit of cars.  These examples are means to the same end: transmitting to commuters whether there are any open spots in a parking lot, via a graphical display and in substantially real time . . . .  Information about open parking spaces has long been broadcast to drivers who cannot actually see the open spaces.  For example, in many major cities, parking garages in which spots are shielded from view have displays on the outside indicating if (and in some cases how many) spots are vacant.

As a result, the Court concluded that "what the patents are really trying to get at is the transmission of substantially real time data of whether there are any open parking spaces in a given lot."  Thus, "the patents are aimed at moving data (open parking spots or not, and maybe where they are) from one place (the parking lot) to another (the driver's location)."  Consequently, the Court found the claims to be abstract.

Prong Two of Alice

Turning to prong two, the Court looked for an inventive concept in the claims -- "additional features that amount to more than well-understood, routine, conventional activity."  Open Parking took the position that the claims are "limited to specific emerging handheld wireless devices capable of communications including Internet access," require a computer, and involve only the transmission of parking data rather than generic data -- and were therefore significantly more than just an abstract idea.

The Court disagreed.  Citing TLI, the Court concluded that the invention involved "software . . . being executed on a generic computer," and did not solve a problem unique to the Internet.  Particularly:

The seemingly ubiquitous problem of finding open parking spaces during the busy morning rush necessarily exists outside of the Internet, and outside computers altogether for that matter.  Transmitting that data over the Internet to mobile devices might be useful, but it does not override the routine and conventional sequence of events pertaining to finding a parking space.  The process is still (1) look for open space, (2) drive to open space, (3) park in open space.  With these patents, the driver merely looks to her mobile device rather than through her windshield.

Thus, the Court found that the recitation of this process using "basic computer functions" is no more than an abstract idea, and therefore the claims are invalid.

Conclusion

This case, like many that involve § 101 rulings, is certainly open to criticism.  Particularly, when characterizing the invention, the Court did not focus on the ability of drivers to use the invention to travel directly to an open spot, instead of seeking one out in a more iterative fashion.  In fact, the invention could be used before one even begins driving, which is something that is unique to the Internet and cannot be carried out with pen and paper.  Most likely, the broadness of the representative claim convinced the Court to perform the eligibility analysis at a higher level.  Perhaps a more carefully drafted and narrower claim might have won the day.

Nonetheless, cases such as this one are helpful in understanding how district courts are viewing the Enfish / TLI and Ultramercial / DDR dichotomies.  Such an understanding can be instrumental for patentees to navigate the § 101 paths of the U.S. Patent and Trademark Office as well as our court system.