Fact-Finding in Eligibility Analysis: Reviewed De Novo?

Prism Tech v. T-Mobile USA (Supreme Court 2017) [Prism Technologies Petition]

The district court sided with the patentee – Prism Tech’s – finding the user-authentication claims eligible under section 101.  Important for the petition here, the district court relied upon substantial expert testimony as well as other documentary evidence in concluding that the claims were enforceable.

Ordinarily, a district court’s factual findings are reviewed with deference on appeal — even when those factual findings are subsidiary to an ultimate question of law. See, Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015) (In claim construction, appellate court must give deference to a district court’s subsidiary factual findings); Mintz v. Dietz & Watson, Inc., 679 F.3d 1372 (Fed. Cir. 2012) (a district court factual findings underlying an obviousness determination are given deference on appeal); Alfred E. Mann Found. for Sci.Research v. Cochlear Corp., 841 F.3d 1334, 1341 (Fed. Cir. 2016) (a district court’s factual findings underlying an regarding indefiniteness finding must be given deference on appeal).

On appeal here, however, the Federal Circuit rejected the lower court’s determinations without giving any deference to the underlying factual determinations — instead the appellate court here reviewed all eligibility issues de novo, including subsidiary findings of fact.  Note here, that this is the same approach taken by the Federal Circuit in claim construction prior to being reversed by the Supreme Court in Teva.

An element of the Supreme Court’s Teva decisions stems from R. 52(a)(6) of the Federal Rules of Civil Procedure which appears quite clear:

Findings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.

Of course, even in Teva, the Supreme Court did not truly follow R.52 — holding there that seemingly factual determinations based upon intrinsic evidence (such as prosecution history statements) rather then extrinsic evidence need not be given deference.

Prism has now petitioned the Supreme Court for review with the following simple question:

Whether a district court’s factual findings in support of its holding that claims are directed to patent eligible subject matter may be reviewed de novo, as the Federal Circuit requires (and as the panel did in this case), or only for clear error, as Rule 52(a) and corollary Supreme Court precedent require.

The petition also tells the interesting story regarding Prism’s parallel $30 million jury verdict against Sprint. Sprint did not challenge the patents on eligibility grounds and ended up losing in a decision confirmed on appeal by the Federal Circuit.  However,  after the Federal Circuit decided the T-Mobile case, the district court flipped its decision ruling on a post-appeal motion that Sprint should be granted relief from judgment under Fed. R. Civ. P. 60(b).  According to the petition, a major problem with that decision is that the court applied it (without independent analysis) to prevent enforcement of claims not-at-issue in the T-Mobile case.


The major problem with Prism’s case is the patents themselves and the high level of generality used by the claims.   Asserted claim 1 of U.S. Patent No. 8,127,345 is a method for controlling access to protected resources over an IP network.  The network setup includes an authentication server; an access server; and a client computer.  The method then has several steps:

  • Request: The client computer sends an access-request to the access server along with identity data about the client computer.
  • Authentication: The access server then forwards the identity data to an authentication server; and the authentication server authenticates the identity (and stores the identity data in the authentication server)
  • Authorization: The authentication server then authorizes the client computer to receive at least some of the requested resources
  • Permission: The authentication server then permits access to the resources.


The Federal Circuit found that these steps “are directed to the abstract idea of ‘providing restricted access to resources,'” and that the claim does not include any further concrete innovations that would transform it to a patent eligible claim.  On that ultimate question, I don’t see the Supreme Court ruling any differently.

= = = = =

Claim 1 is reproduced below.

1. A method for controlling access, by at least one authentication server, to protected computer resources provided via an Internet Protocol network, the method comprising:

receiving, at the at least one authentication server from at least one access server, identity data associated with at least one client computer device, the identity data forwarded to the at least one access server from the at least one client computer device with a request from the at least one client computer device for the protected computer resources;

authenticating, by the at least one authentication server, the identity data received from the at least one access server, the identity data being stored in the at least one authentication server;

authorizing, by the at least one authentication server, the at least one client computer device to receive at least a portion of the protected computer resources requested by the at least one client computer device, based on data associated with the requested protected computer resources stored in at least one database associated with the at least one authentication server; and

permitting access, by the at least one authentication server, to the at least the portion of the protected computer resources upon successfully authenticating the identity data and upon successfully authorizing the at least one client computer device.

49 thoughts on “Fact-Finding in Eligibility Analysis: Reviewed De Novo?

  1. 15


    Yes, the patent maximalists are the world’s most ridiculous people.

    1. 15.1

      Comparatively speaking, I suppose that we all should be thankful that this version of mindless ad hominem is at least “directed to” patents…

  2. 14

    Anybody know Judge Roy Moore’s positions with respect to patent policy?

    He’s a very important person to a certain faction of the Republican Party. Which is a very important and serious group of people. Very serious! And very principled. Filled with glibertarian types, who tend to be patent maximalists.

    Oh wait — Roy Moore is more likely to end up in jail than sit in the Senate for more than a month. My bad. Sorry.

    Heckuva party, Repu k k kes.

    1. 14.1

      What the F have to do with patent law (and how is this any different than the repeated items expunged time and again)?

      It’s like Malcolm only cares for his (limited) script and “rules” just do not apply to him…

      Or something.

  3. 13

    OT, but interestingly, Gene’s IPWatchdog blog today contains Oil States decision prognostications collected by Gene from by several real world patent experts which are contrary to the frequently strongly expressed unconstitutionality views of Gene and other authors and commentators on that blog:

    link to ipwatchdog.com

    1. 13.1

      This is a very big constitutional law case, which most patent lawyers do not appreciate. Most of the commentaries are from patent lawyer types, not from constitutional lawyer types, who tend not to even know about the constitutional law issues involved here. I think the Supremes will be more concerned with the big picture that with issues that concern patent lawyers.


          Yes. Their brief is, however, premised on the historical record, not about admin law.

          It begins,

          “A government’s grant of an invention patent does not create a core private property right immunized from administrative reexamination for compliance with statutory requirements. In Great Britain and the states of the early Republic, the sovereign retained the right to revoke invention patents. “

      1. 13.1.2

        Ned, I’m rooting for your side here. But despite the bigger picture, the chaos that would ensue if the Supreme Court reverses would be unimaginable. What would happen if: A sued B for infringement, B invalidated A’s patent in an IPR and the litigation was dismissed, and many years pass. We all know this scenario has taken place hundreds of times. Now what? Can A sue B again? What if the patent has expired? what if the maintenance fees on the patent were intentionally never paid because the patent was held invalid?

        What a mess.


          patent leather, in the movie, the girl’s father to the Graduate, “I have one word for you: plastics.”

          Well patent leather, I have one word for you: waiver.

          Very few, on advice of their counsel that they would be sanctioned (yes, the said publicly that I should be sanctioned), punted rather than raise the constitutionality of IPRs, even after they became aware of my case, certainly after the Federal Circuit gave me a roast, and then we had the Supreme Court denial of cert. But, others noted that the Supreme Court had carried our case over to a second conference, which indicates interest. But the court was without Scalia, and therefor was split 4-4 (looking at the 5-4 split in Stern). That is why they declined certiorari last year. This year, with Gorsuch, there is a 5-4 majority likely.

          Also, Kennedy was going to retire, but held off for one year. Why? This case.

  4. 12

    This case illustrates one of the problems of voiding via 101. The patent claims that I read cover a method of organizing computer activity. They transform an insecure networking system into a secure networking system. The knowledge encompassed is synthetic but almost certainly covers much more than is enabled in the written description and is either anticipated or obvious.

    Issues of the case aside, I quickly glanced over the specification and diagrams of “Method and system for managing access to protected computer resources provided via an internet protocol network” US 8127345.

    I think the metes and bounds of Claim 1 may encompass Needham–Schroeder protocol implementations with which I experimented in the middle 80s.

    At the priority date (Jun 11, 1997) the Needham-Schroeder protocol had long been published and easily obtainable. Just check out the following publication:

    Needham, Roger; Schroeder, Michael (December 1978). “Using encryption for authentication in large networks of computers.”. Communications of the ACM. 21 (12): 993–999.

    This article seems to have been disclosed in an IDS. It is in the list of Other Publications on page 10 of the published patent.

    The applicant may have overwhelmed the examiner with citations. This strategy may not have risen to the level of inequitable conduct, but a lot of the claims should never have been allowed.

    1. 12.1

      BTW, when I write synthetic, I am following the definitions that I give in this link.

      link to linkedin.com

      My current dream is to take part strategically in an infringement case in which 101 eligibility is an issue. I would try to get a renowned philosopher hired to explain epistemology in an expert report in order to give the concept of “abstract idea” a rational basis that could be addressed at the level of a federal district court, of the CAFC, and eventually of SCOTUS.

      Then during examination at least patent practitioners will be able

      1) to formulate persuasive counterarguments to 101 rejections and

      2) to avoid 101 pitfalls during the drafting of claims.

      1. 12.1.1

        But, Joachim, what if the courts only mean by abstract is to not claim a new or improved manufacture?


          Yes Joachim that is the problem. Courts take words and make them mean something else. This is common practice.

      2. 12.1.2

        Joachim, presumably you are familiar with Kevin Collins’ writings in this area. Off the top of my head, I’d guess he’s about ten years ahead of you on this issue.


          As already noted (Malcolm must have blinked), Collins was referenced by Joachim, and it was responded to that Collins is simply far too dissociated with innovation and protecting innovation through patents.

          Collins is a total mind w a n k.


            Collins is simply far too dissociated with innovation


            What kind of “innovation” are we talking about, Billy?



              The most cost-accessible kind, which you oh so conveniently never explained the dichotomy of your attempts to eliminate.

              Go figure.

      3. 12.1.3

        I would try to get a renowned philosopher hired to explain epistemology in an expert report

        Sounds like a nice way to waste money. Unless the philosopher is your buddy.

        This stuff really isn’t that difficult, Joachim. Also, nobody in their right mind wants to be associated with you in any capacity for reasons that are pretty obvious from a quick Internet search.

        But you’re a very serious person! You invented the Internet, in your own mind.


          MM is a student of Ben’s straw based method of disputation.

          When one disagrees with another person’s arguments but have no counterargument, distort the other person’s arguments to the point of silliness and then discount his arguments.

          I stated that I had invented a key component of modern cloud computing which I described in the spec and claims of the 07/773,161 application (public but not published).

          The spec and claims of this application can be found in the public and published 13/368,316 continuation application. They support my statement.


            Sadly, this is exactly the type of blight that has long festered here (Malcolm engaging thus for now more than eleven and a half years)


            That “how to guide” aptly describes the most of the counter-arguments presented by the government and its amici in Oil States. They never really address McCormick Harvesting or ex parte Wood & Brundage, and completely mischaracterize English law concerning the common law writ scire facias.

            However, they do make strong points: that reexaminations and IPR are indistinguishable from a constitutional point of view and the concession by Oil States of the constitutionality of reexaminations is all the court has to look at. Second, that whether validity was litigated in the common law courts in infringement trials is totally irrelevant to whether there is a constitutional right to a jury trial in actions to revoke patents.


              A non-lawyer question. Can SCOTUS decide Oil States erred with respect to the constitutionality of reexaminations and judge both IPR and reexamination to be unconstitutional?

              If Gorsuch and friends really intend to blow away Chevron deference and administrative overreach while they confirm that a granted patent is a private right, such a judgment would make sense.


                The Court may not make “advisory opinions.”

                If the issue of reexaminations is not before the Court, they may not reach out to that issue.

                1. Of course they will not decide that issue, but the Supreme Court is always concerned about the direct impact of its decisions on very similar laws, particularly on a constitutional issue.


                The actual Oil States issue is not “administrative overreach” it is alleged Congressional overreach.

    1. 11.1

      1) Traditional? How long must something be around for it to be a tradition in your view?

      2) Maybe it does.

      3) The claimed method is pretty specific. Maybe they do their authorization some other way. For example, without both an authentication server and an access server. Or without doing this: receiving, at the at least one authentication server from at least one access server, identity data associated with at least one client computer device, for example. Maybe in their systems the the authentication server receives identity data directly from the client computer and not from the access server.

  5. 10

    Very interesting story. Thirty million riding that could have gone the other way based upon a few days.

  6. 9

    There is an absurd, unrepeatable and unjust range of procedure around the 12(b)6 that means every single case is a crapshoot. Some judges allow expert testimony, others stick to the four corners of the patent and the prosecution history, while others treat the whole thing as a pre-season MSJ. In some courtrooms, all the plaintiff has to do is utter “unconventional” and the judge does not see enough of a record to say otherwise. In others, the judge runs a mini-trial with all the fixings.

    The solution is a formal Markman type step where what the invention is is construed. What we have now is a travesty.

    1. 9.1

      There’s no point in “construing” elements about which there is zero dispute or even the possibility of one. And that’s the fact situation we have in nearly all of these “do it on a computer” cases.

      In pretty much every instance where “unconventionality” is alleged the plaintiff is l y i n g.

      Open your eyes.

      1. 9.1.1

        Tell me about the conventionality of protons, neutrons and electrons…

        Tell me about the conventionality of how these things are put together…

  7. 7

    Sprint did not challenge the patents on eligibility grounds

    Would love to have been in the room when that decision was made. Let me guess: somebody at Sprint has a friend who prosecutes their patents. Awwww, so cute.

    1. 7.1

      I’m guessing Sprint did not want to be their own enemy and be responsible for a 101 decision which could question the validity of Sprint’s own patents.

  8. 6

    Request, Authentication, Authorization, Permission:

    B-b-b-ut our display is dynamic and the interface is customizable by the user. Can we haz patent now?

    Grow up, people. Please.

  9. 5

    Just out of curiosity, what were the “factual findings” made by the district court? I’m trying to imagine what “fact” could even be contestable that would make a difference here.

    The Supremes don’t tend to take cases where the disputed issue has no bearing on the outcome does it? The district court in this case plainly got something very very very wrong and, whatever standard the CAFC applied (reverse only when “clear error” or “only when the error is so extreme that it induces v0 miting”) the result is that the patent ends up in the trash.

    These plaintiffs should have been sanctioned out of business in a reasonable and just patent system. Corporate death penalty, plus some veil piercing. That’s one way to end the farce. There’s another cleaner way, however.

  10. 4

    A chance to slap the CAFC without actually having to consider any of the tedious technical details of the patent? Yeah, I could see the SCotUS going for this one.

  11. 2

    A method for controlling access

    Up goes the red flag.

    News flash: if you are paying money to someone to prosecute a “do it on a computer” claim with this preamble, you are throwing your money down the drain. Or, more accurately, you are going to the patent attorney petting zoo and buying a cub of kibble for the attorney to munch on. You get to watch and feel the wet tongue on your hand and maybe the attorney turns around and defecates so it has room for more kibble. Fun! Bring the family.

  12. 1

    The issue: the treatment of facts.

    This is an issue (apparently) whenever a desired Ends/narrative is not being reached.

    1. 1.1

      The issue: the treatment of facts.

      Oh, let’s all pay attention to “anon”, the blog’s resident path 0 l0 gical l i ar.

      Can you sing the song about software not being logic? That’s so pretty.

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