by Dennis Crouch
In Rady v. The Boston Consulting Group, Inc., No. 2022-2218 (Fed. Cir. Mar. 27, 2024), the Federal Circuit affirmed the dismissal of a patent infringement lawsuit, holding that the asserted claims of Rady’s US10469250 were ineligible under 35 U.S.C. § 101. The patent, owned by Max Rady, patent describes scanning a physical item, determining its unique pattern of imperfections (i.e., “signature”), and recording that signature to a blockchain if not previously registered.
Claim 1, treated as representative, recites:
A network node comprising:
one or more processing devices;
a storage device […];
a communications subsystem […]; and
item analysis components […] comprising at least one imaging device configured to determine spectral analysis data and 3D scan data […];
wherein the one or more processing devices operate to configure the network node to: analyze an instance of a physical item using the item analysis components to determine a unique signature […] using 3D spatial mapping […] from the spectral analysis data and 3D scan data […];
determine, using the unique signature, whether the instance of the physical item is previously recorded to a blockchain […], comparing the unique signature […] to previously recorded unique signatures using 3D spatial analysis techniques, rotating in virtual space features of the physical item defined in the unique signature to determine a match […]; and
record the instance of the physical item to the blockchain in response to the determining […].
BCG filed a Rule 12(b)(6) motion to dismiss, arguing that the claims were directed to the abstract idea of collecting, processing, and storing data to track physical items without actually improving the computer technology. The district court granted the motion, finding that while Rady’s system records a gemstone’s “fingerprint” on a blockchain, it does not improve blockchain functionality or describe how it improves blockchains, and that the physicality of objects being tracked does not make the claims less abstract.
Applying the two-step Alice framework, the Federal Circuit agreed with the district court that the “claims directed to gathering and storing data, without more, are impermissibly abstract.” citing Int’l Bus. Machs. Corp. v. Zillow Grp., Inc., 50 F.4th 1371 (Fed. Cir. 2022) and In re Killian, 45 F.4th 1373 (Fed. Cir. 2022).
The court noted that identifying items by their unique physical features is a long-standing practice, analogizing to the Supreme Court’s decision Bilski v. Kappos, 561 U.S. 593 (2010) discussing fundamental economic practice long prevalent in commerce. The court also cited Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161, 1167 (Fed. Cir. 2019), which found claims reciting a method for electronically processing checks to be patent ineligible as directed to a long-standing commercial practice.
While the claims recite specialized hardware components, the court explained that this does not alone save them from abstraction. See BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281 (Fed. Cir. 2018) (“[C]laims are not saved from abstraction merely by reciting components more specific than a generic computer.”). The court emphasized that the claims’ principal shortcoming is reciting generic steps and results rather than a specific technological solution, as the patent relies on existing devices and techniques to analyze object imperfections and uses conventional blockchain technology.
The court stated that “Rady’s specification ‘underscores the . . . abstract nature of the idea embodied in [his] claims,'” because “rather than purporting to disclose any technological improvement to the item analysis components, it confirms that such devices are used in the same manner as they have been used in the past.” An example here, the claim requires gathering “spectral analysis data and 3D scan data” about the unique imperfections present in physical objects. However, the claim itself does not even provide the technical details but instead relies upon reference to existing devices.
At step two, the court concluded that the claims fail to recite elements that transform the abstract idea into a patent-eligible application. The court found that Rady did not plausibly allege that recording the imperfection data on a blockchain supplies an inventive concept, as the patent does not disclose any improved blockchain technology. The court noted that “recording a particular type of information—data about the unique pattern of imperfections in a physical object—to a blockchain does not mean that it improves the underlying blockchain technology.”
At oral arguments, Rady’s attorney, Steven Tiller argued that the technological problem being solved is associated with being able to track physical items without attaching anything physical to the item.
So the technological problem is being able to have self-providence of items, to be able to track an item based on the characteristics of the item, as opposed to, Your Honor, using QR codes. QR codes are applied to items. As opposed to RFIDs, those are applied to items. As opposed to etchings, etchings were traditionally a way to follow diamonds through the supply chain.
But the Federal Circuit appears to have rejected this argument. The court acknowledged that Rady’s claimed system may be useful in preventing the counterfeiting of gemstones, but it emphasized that utility alone is not sufficient for patent eligibility:
Rady’s claimed system may be useful in preventing the counterfeiting of gemstones, but utility is not the measure of patent eligibility.
The court quoted Myriad’s statement that a “groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry”.
The Federal Circuit also rejected Rady’s argument that the district court prematurely resolved eligibility at the pleading stage. The court explained that “[b]ecause Rady failed to present non-conclusory allegations that his patent disclosed any specific technical improvements to computers, measurement devices, blockchains, or any other technology, . . . the district court properly resolved the eligibility question at the pleadings stage.”
The per curium opinion was issued by the panel of Judges Reyna, Mayer, and Cunningham. Steven Tiller argued for Max A. Rady and Mr. Brian Matsui for BCG.
= = =
For reference, the following is the currently pending claim in the parallel case at the EPO. The European claim goes into greater detail about the item analysis components, including a spectral imager, light source, range scanner, calibration target, and a mechanism of movement. In contrast, claim 1 of the ‘250 patent more broadly recites “item analysis components comprising at least one imaging device configured to determine spectral analysis data and 3D scan data.”
12. A network node comprising:
one or more processing devices (222);
a storage device (206) coupled to the one or more processing devices (222) and storing instructions for execution by at least some of the one or more processing devices (222);
a communications subsystem (228), coupled to the one or more processing devices (222), to communicate with at least one or more other nodes of a peer-to-peer network; and
item analysis components (208, 210, 212, 218, 220) coupled to the one or more processing devices (222), the item analysis components configured to determine analysis data from measurements generated by the item analysis components (208, 210, 212, 218, 220);
wherein the item analysis components comprise:
a spectral imager configured to assess (510) the spectral hypercube data of the physical item, to identify (512) irregularities in composition of the physical item, notably the radiometric measurements at various spatial frequencies;
a light source configured to provide broad spectrum illumination on the physical item;
a range scanner configured to assess (508) the 3D spatial data of the object;
a calibration target configured to determine a geometric relationship between the range scanner and the spectral imager; and
a mechanism of movement configured to move the physical item and assessment devices relative to one another to allow a 360-degree assessment of the physical item; and
wherein the one or more processing devices (222) operate to configure the network node to:
analyze an instance of a physical item using the item analysis components to determine a unique signature for the instance, the unique signature comprising a 3D spatial map generated from at least spectral analysis data and 3D scan data
for the physical item;determine, using the unique signature, whether the instance of the physical item is previously recorded to a blockchain maintained by the peer-to-peer network to provide item tracking and authentication services by comparing the
unique signature generated by the network node to previously recorded unique signatures using 3D spatial analysis techniques, rotating in virtual space features of the physical item defined in the unique signature to identify a match with features defined in the previously recorded unique signatures; andrecord the instance of the physical item to the blockchain in response to the determining whether the instance is previously recorded.
>The court noted that identifying items by their unique physical features is a long-standing practice,
FWIW, that’s not quite what they claimed. Instead, the patentee claimed identifying individual items of a class of similar items by the unique flaws in that particular item i.e., ” identify (512) irregularities in composition of the physical item.”
It’s the difference between saying “give me a red pencil” and saying “from a box of 100 functionally-identical red pencils, give me the particular red pencil with a superficial paint bubble exactly 2.3 inches from the eraser.”
If the items are two pencils and one is red that fits within the concept here just fine. There are no limitations in the claim regarding the size or degree of any identifying property of an item, nor is there any limitation on the number of items except there is at least implicitly more than one item.
This is a typical claim drafting failure in the logic arts, i.e., over-claiming at the bottom end which exposes the abstract nature of the logic being claimed.
Anything outside of your one-bucket of exacting picture claim is a “typical claim drafting fa1lure” FOR YOU.
If you make red and blue pencils, then “red” and “blue” aren’t “irregularities in composition.”
Particularly at the 101 stage. The entire goal of the industrial revolution is make such irregularities irrelevant.
side note: I can think of a few nitch applications where this is done e.g., individual cross country skiis are first matched into pairs, and then further matched to a particular skiier. But 999999998% (six sigma) of manufacturing tries to operate in the exact opposite manner.
Whether the differences between items are described as “irregularities” or “differences” is beside the point. The technology doesn’t care.
^^^
The type of “thinking” that prompts Malcolm to try to reformat his hard drive with that Britney Spears CD.
But it does… the only way you’ll get a fingerprint for a particular item is by focusing on the irregularities (mistakes)
Put differently, if you just put “blue” and “pencil” on the blockchain, you’ll get 1 billion identical signatures.
My point is the tools are the same. If you tell me to “pick a crayon that is different” from a set comprising four red crayons and an otherwise identical blue crayons, I’ll look at the crayons and pick the blue crayon. If I looked more closely, I could alternatively pick the only crayon that has a little rip in the paper label. If you told me to describe each crayon in a manner that allows another person to identify them uniquely, I’d look at each of them and document the differences. Same tools, same tech. If I needed to look closer than my eyes could see, a magnifying class would be an obvious choice (that’s not inventing). If I needed a pencil and paper and a chart to document all the differences, that would also not be inventing. If you tell me that I need to decide what’s an “irregularity” versus what is not an “irregularity” that would require some logic/assumptions/definitions which are also not inventive (and are ineligible).
This is true:
“Spectral imager 208 (spectroradiometer) assesses the asset’s spectral hypercube data, identifying irregularities in composition of the asset, notably the radiometric measurements at various spatial frequencies. Such measurements are as described in the paper 3D Imaging Spectroscopy for Measuring Hyperspectral Patterns on Solid Objects.
Laser projector and laser receiver 210 (laser range scanner) assesses the 3D spatial data of the object, and geometric irregularities (which may include items such as inclusions in gemstones). Such measurements are also described in the paper 3D Imaging Spectroscopy for Measuring Hyperspectral Patterns on Solid Objects.”
“In any of the aspects, the item analysis components may be configured to measure physical features comprising any of anomalies, defects, imperfections, noise and geometric irregularities that are either naturally occurring or human made through a process to produce a unique non-reproducible randomness that uniquely identifies an asset.”
“ the physicality of objects being tracked does not make the claims less abstract”
Unbelievably sad that this basic concept even has to be repeated in this context in 2024 but here we are.
^^^ Translated from the original script of the most holy nine in which they (unbidden, as lost sides had averred that claims – as a whole – were clearly to hard goods) declared that such hard goods were still abstract.
See Alice.
“ declared that such hard goods were still abstract.”
Zombie l i e that confuses claims improperly protecting abstract “inventions” with objects that fall within the scope of those claims. See, e.g., a claim to a book describing a useful non-obvious scientific fact.
Not a L i e – and you know it.
Show everyone where the Supreme Court said “not just the claim or the alleged invention, but this [physical object] itself is an abstraction.”
Or anything similar to that. Go for it. I’m happy to be wrong about the Supreme Court saying something like that.
Just provide the cite and the verbatim quote.
It is on the record, as well as having been stated on this blog.
Your Br’er Rabbit, tell me AGAIN game is declined.
You have a funny way of conceding.
That’s because I am not conceding.
There you go again – jumping in on the wrong side.
I suppose that’s the only exercise you get, as a litigator.
Another easy one for my scheme, not ambiguous & about 10 seconds for any examiner to pass for eligibility.
Is it a method? Yes
Does the utility of the method arise from some item of information? Yes
Does the utility of the new item of information arise in a human mind? No, the utility is realized by the blockchain, as the 3D map has no human meaning.
Eligible
Should this be a patent? Hel lz No. Obvious as the sunrise. Done for centuries in other contexts, including cops tracking fingerprints and biologists tracking whale flukes and on and on and on.
^^^ nigh endless pandering disconnected from actual patent law.
Thank you ‘sarah of the Snyder’
Patent law as I wish it to be is a valid subject matter on this blog foo l, until someone says otherwise that ain’t you.
anon has trouble discussing policy. anon considers pro-agenda decisions to be decided law, and contrary decisions to be a flaw in the system. It is really quite sad.
While I disagree with your patentability formulation, I see its merit.
Oh, I have no problems at all discussing policy, NS II (you again jump in incorrectly).
Not sure what it is though you mean by “pro-agenda decisions”
And certainly, policy attributes very much inform what I suspect you mean by “contrary decision,” and there is no shortage of flawed decisions.
That you (and the likes of marty) do not understand WHY certain decisions ARE flawed – those are critical mistakes.
It is akin to the difference between having an ‘any-ol’ opinion and an informed opinion.
It is always better to have an informed opinion.
Neither of you are willing to do that.
“It is always better to have an informed opinion.”
says Billy who struggles with acknowledging that data and logic are abstractions.
Says the guy who does not understand the patent equivalence of computing wares…
¯\_(ツ)_/¯
… did you ever recover from reformatting your hard drive with that Britney Spears CD?