Innovation Sciences, LLC v. amazon.com, Inc.

• Court: Court of Appeals for the Federal Circuit
• Decided: July 2, 2019
• Docket: 18-1495
• Status: Unpublished

Opinion

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

INNOVATION SCIENCES, LLC, Plaintiff-Appellant

v.

AMAZON.COM, INC., Defendant-Appellee ______________________

2018-1495 ______________________

Appeal from the United States District Court for the Eastern District of Virginia in No. 1:16-cv-00861-LO-MSN, Judge Liam O'Grady. ______________________

Decided: July 2, 2019 ______________________

DONALD LEE JACKSON, Davidson Berquist Jackson & Gowdey, LLP, McLean, VA, argued for plaintiff-appellant. Also represented by JAMES DANIEL BERQUIST.

J. DAVID HADDEN, Fenwick & West, LLP, Mountain View, CA, argued for defendant-appellee. Also represented by SAINA S. SHAMILOV, RAVI RAGAVENDRA RANGANATH; TODD RICHARD GREGORIAN, San Francisco, CA. ______________________ 2 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

Before LOURIE, MOORE, and CHEN, Circuit Judges. MOORE, Circuit Judge. Innovation Sciences, LLC, 1 sued Amazon.com, Inc., for infringing claims of U.S. Reissue Patent No. 46,140, U.S. Patent No. 9,369,844, and U.S. Patent No. 8,135,398. The District Court for the Eastern District of Virginia held that the asserted claim of the ’140 patent was ineligible under 35 U.S.C. § 101, the parties stipulated to noninfringement as to the asserted claims of the ’844 patent, and the district court granted summary judgment of noninfringement as to the asserted claims of the ’398 patent. For the following reasons, we affirm as to the ’398 and ’140 patents and af- firm-in-part, vacate-in-part, and remand the stipulated judgment of noninfringement as to the ’844 patent. DISCUSSION I. The ’140 Patent The ’140 patent is titled “Method and System for Con- ducting Business in a Transnational E-Commerce Net- work.” The specification states that the invention seeks to “overcome[] the lack of adequately secure encryption and decryption in a merchant server to which a buyer wishes to provide credit card information for the purchase of prod- ucts posted on such merchant server.” ’140 patent at 2:63– 67. It describes how “a conventional Internet transaction system having adequate credit card information security” carries out secure Internet transactions. Id. at 3:60–4:17. It contrasts this system to one in which products are listed on a server without adequate transaction security. When a buyer wishes to purchase a product listed on such a

1 Virginia Innovations Sciences, Inc., the owner of the patents when this suit began, merged into Innovation Sciences, LLC, while this appeal was pending. We refer to the patent owner as Innovation Sciences throughout. INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 3

server, the ’140 patent says to shift the buyer to a separate payment server with adequate transaction security to se- curely transmit the payment information. Id. at 4:18–59. Claim 17 is the only claim at issue. It recites: 17. An online method for a payment server to sup- port online buying over the Internet, the online method comprising: receiving, at the payment server, credit card payment information transmitted from a buyer for payment of one or more items identified for purchase from a web- site listing the items, wherein the credit card payment information is received after online communication of the buyer has been switched from the website listing the items to a website supported by the pay- ment server, wherein the switching of the online communication of the buyer is after an indication from the buyer to buy the one or more of the items; sending the credit card payment infor- mation to an established financial channel; receiving a credit card payment processing decision from the established financial channel; and sending credit card payment confirmation information; wherein: transmission of information about the items for purchase between a server sup- porting the website listing the items and the buyer, before occurrence of the indica- tion to buy, is less secure than transmis- sion, from the buyer, of the credit card 4 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

payment information, the transmission of the credit card payment information being performed under a security protocol for en- cryption of the credit card payment infor- mation, said security protocol providing at least 128 bit encryption for the credit card payment information; the payment server has a respective IP ad- dress different from a respective IP address of the server supporting the website listing the items; the sending of the credit card payment con- firmation information updates the server supporting the website listing the items, with respect to the purchase of the one or more items identified by the buyer, in sup- port of a real-time purchasing/sales envi- ronment on the website listing the items; the server supporting the website listing the items is in one of a first nation state or a second nation state; and the payment server is in the first nation state. ’140 patent at Claim 17. “We review the grant of summary judgment under the law of the regional circuit in which the district court sits,” here the Fourth Circuit. Classen Immunotherapies, Inc. v. Elan Pharm., Inc., 786 F.3d 892, 896 (Fed. Cir. 2015). The Fourth Circuit reviews a grant of summary judgment de novo, “applying the same legal standards as the district court and viewing all facts and reasonable inferences there- from in the light most favorable to the nonmoving party.” Grutzmacher v. Howard Cty., 851 F.3d 332, 341 (4th Cir. 2017). Eligibility under § 101 is a question of law, based INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 5

on underlying facts. SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018). “Whoever invents or discovers any new and useful pro- cess, machine, manufacture, or composition of matter, or any new and useful improvement thereof,” may obtain a patent. 35 U.S.C. § 101. As a judicially created exception to this provision, “[l]aws of nature, natural phenomena, and abstract ideas are not patent eligible.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (quoting Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). All inventions at some level “em- body, use, reflect, rest upon, or apply” these concepts, but if an invention applies these concepts to a new and useful end, it is patent eligible. Id. at 217. The Supreme Court has established a two-step framework for “distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible appli- cations of those concepts.” Id. “First, we determine whether the claims at issue are directed to” a patent-ineli- gible concept. Id. If so, “we consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78–79 (2012)). The district court granted summary judgment that this claim was ineligible under § 101. At Alice step one, the dis- trict court concluded that claim 17 is directed to “the result of securely processing a credit card transaction with a pay- ment server,” an abstract idea. J.A. 59–60. At Alice step two, the district court concluded that the claim lacked a sufficient inventive concept because it only recites “an ‘ab- stract functional description devoid of technical explana- tion as to how to implement the invention.’” J.A. 61 (quoting In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 615 (Fed. Cir. 2015)). The district court rejected Inno- vation Sciences’ argument that an inventive concept is 6 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

found in the limitation stating that “the buyer has been switched from the website listing the items to a website supported by a payment,” because the claim only recites the “switching” result. J.A. 60–61. Innovation Sciences did not identify any “algorithm, computer program, or mecha- nism for performing the switch.” J.A. 61. A Innovation Sciences argues the district court improp- erly placed the burden on it to prove eligibility. It points to the portion of the district court’s opinion stating that it “has not presented sufficient evidence to show that the ’140 pa- tent discloses a means of accomplishing switching from the website listing the items to a website supported by the pay- ment server.” J.A. 58. We disagree that the district court shifted the burden. In the Fourth Circuit, “it is ultimately the nonmovant’s burden to persuade [the court] that there is . . . a dispute of material fact.” CoreTel Va., LLC v. Verizon Va., LLC, 752 F.3d 364, 370 (4th Cir. 2014). “[M]erely conclusory allega- tions or speculation” is not enough. Id. This portion of the district court’s opinion restates its position during the claim construction stage that the patent “lacked detail re- garding the shift between servers.” J.A. 58. The district court was simply stating that Innovation Sciences did not introduce evidence sufficient to create a genuine dispute of material fact to this point. B At Alice step one, Innovation Sciences argues claim 17 is directed to an improvement in an online payment pro- cessing system that allows merchants to overcome the problem of inadequate security for the transmission of pay- ment information. It argues that by switching the online communication between the buyer and merchant to a se- cure communication channel for transmission of payment information, the invention implements a new technological INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 7

solution. It points to the specification’s disclosure of how the system functions as evidence that “the invention re- lates to a novel dedicated payment server logically and physically separated from a conventional merchant server for increased security during online transactions.” Appel- lant’s Br. 57 (citing ’140 patent at 4:31–44, Figs. 2, 4A–4B). We agree with the district court that claim 17 is di- rected to the abstract idea of securely processing a credit card transaction with a payment server. The claim recites, in merely functional, result-oriented terms, receiving credit card payment information at a server different from the server on which the item for purchase is listed, sending the payment information “to an established financial chan- nel,” receiving a “processing decision” from that channel, sending payment confirmation, and updating the server supporting the website listing the item that the item was purchased. See Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1345 (Fed. Cir. 2018) (holding that a “broad, re- sult-oriented” construction of a term encompassed a pa- tent-ineligible abstract concept rather than a technical improvement because “[i]nstead of claiming a solution for producing that result, the claim in effect encompasses all solutions”). “This ordered combination of steps recites an abstraction—an idea, having no particular concrete or tan- gible form.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). The recitation of servers and an es- tablished financial channel serves to “limit[] the field of use of the abstract idea to a particular existing technological environment,” but it “does not render the claims any less abstract.” Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1259 (Fed. Cir. 2016). The fact that communication is “switched” from a web- site hosted on one server to a website hosted on another server with better security does not mean the invention is directed to “a specific improvement in the capabilities of computing devices.” Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1361 (Fed. Cir. 2018). The 8 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

invention does not purport to improve the payment server or the server on which the item for purchase is listed. In- stead, it simply claims the idea of switching to a more se- cure server for payment processing. Neither the claims nor the specification recite any specific way to carry out such a switch. See ’140 patent at 4:33–39 (“When . . . the buyer indicates a desire to submit credit card information, the buyer is shifted to the payment server 33 for direct commu- nication therewith for entry of credit card information onto the secure transaction system.”). C At Alice step two, Innovation Sciences argues claim 17 includes an inventive concept sufficient to transform the abstract idea into a patent-eligible application. It points to the elements associated with the switching limitation as the inventive concept. It also asserts that the district court lacked a sufficient factual basis to determine that the claims lacked an inventive concept. We agree with the district court that claim 17 lacks an inventive concept. The claimed steps beginning with the transmission of the credit card payment information through the completion of the purchase are the same as those used in “a conventional Internet transaction system having adequate credit card information security,” as the specification admits. See ’140 patent at 3:60–4:17; see also id. at 2:6–31. There is no inventive concept in the claim’s use of a generic payment server “to perform well-under- stood, routine, and conventional activities commonly used in industry.” Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1348 (Fed. Cir. 2014). The switching from a less secure server to a more secure server similarly does not provide an inventive concept. The claim seeks to capture the broad concept of switching to a more secure server, rather than a specific way to do so. “[T]ransformation into a patent-eligible ap- plication requires more than simply stating the abstract INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 9

idea while adding the words ‘apply it.’” Alice, 573 U.S. at 221 (internal quotation marks omitted). We do not agree that factual issues preclude summary judgment here. The specification admits that merchant servers for carrying out a secure transaction were conven- tional. Innovation Sciences points to no evidence that dis- putes this fact. Nor does it specify what facts are purportedly in dispute, arguing generally that the Alice step two determination “presents triable issues of fact as to inventiveness.” Appellant’s Br. 63. But Alice step two is question of law, with underlying factual determinations that may inform the legal determination. BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). Here, we see no genuine disputes of material fact. We therefore hold that claim 17 is ineligible under § 101. II. The ’844 Patent The ’844 patent relates to the “wireless management of tasks and corresponding alerts” based on “wireless delivery of alerts to overcome the problem of estimating when the task requires completion.” ’844 patent at 9:55–62. Innova- tion Sciences asserted claims 28–60 of the ’844 patent. Claims 28, 35, and 52 are the independent claims at issue. Claim 28 is to a “wireless device” and recites: 28. A wireless device configured to facilitate elec- tronic communication of information, the wireless device comprising: a processor; a wireless radio chip containing infor- mation of a unique identifier corresponding to the wireless device; a memory configured to store program code that includes instructions executable by said processor, said instructions compris- ing: 10 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

instructions for transmitting, through a wireless transmission channel, an item sta- tus signal to provide information regarding an updated condition of a merchandise, wherein the wireless transmission channel is established in a local wireless communi- cation network in response to an indication of the updated condition and the wireless transmission channel is established for transmission of the item status signal by the wireless device; and wherein the unique identifier correspond- ing to the wireless device is recognized dur- ing a processing of a purchase request for the merchandise regarding the updated condition based on a successful transmis- sion of the item status signal; wherein the purchase request for the mer- chandise is identified based on recognition of the unique identifier; wherein information of a user account is communicated through a communication channel to accommodate the processing of the purchase request; wherein the user ac- count is associated with the wireless de- vice; and wherein the wireless transmission channel is separate from the communication channel, the information of the user account comprising the infor- mation for the processing the purchase re- quest; and wherein the wireless device is designated to transmit the item status signal. INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 11

’844 patent at Claim 28. Claims 35 is to a “system for fa- cilitating electronic communication of secure information.” It recites: 35. A system for facilitating electronic communica- tion of secure information, the system comprising: at least one database configured to store in- formation of a user account associated with a wireless signal transmitter, wherein the wireless signal transmitter is designated to transmit an item status sig- nal to provide information regarding an up- dated condition of a merchandise; wherein the item status signal is transmit- ted through a wireless communication channel from the wireless signal transmit- ter; the wireless communication channel being established in a local wireless com- munication network in response to an indi- cation of the updated condition, the wireless communication channel being es- tablished for transmission of the item sta- tus signal from the wireless signal transmitter; wherein the system is configured to recog- nize a unique identifier corresponding to the wireless signal transmitter based on a successful transmission of the item status signal; wherein the system is further configured to identify a purchase request for the mer- chandise based on recognition of the unique identifier corresponding to the wireless sig- nal transmitter; 12 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

wherein the information of the user ac- count comprises information for a pro- cessing of the purchase request; and at least one output interface configured to communicate the information for the pro- cessing of the purchase request through a communication channel to accommodate a completion of the processing of the pur- chase request, the communication channel being separate from the wireless communi- cation channel established for the trans- mission of the item status signal; and wherein the system is configured to update the user account with confirmation infor- mation regarding the processing of the pur- chase request. Id. at Claim 35. Claim 52 is a method claim and is other- wise similar to claim 35. Following claim construction, Innovation Sciences stip- ulated that Amazon does not infringe claims 28–60 of the ’844 patent and reserved its right to appeal. J.A. 57. On appeal, Innovation Sciences disputes the district court’s constructions of four terms: (1) “communicated through a communication channel to accommodate the processing of the purchase request” in claim 28 and corresponding limi- tations in claims 35 and 52, (2) “item status signal,” (3) “an updated condition of a merchandise,” and (4) “the merchan- dise.” Because the district court did not make any subsidiary factual findings, we review its constructions de novo. Da- vid Netzer Consulting Eng’r LLC v. Shell Oil Co., 824 F.3d 989, 993 (Fed. Cir. 2016). The words of a claim “are gener- ally given their ordinary and customary meaning,” which is “the meaning that the term would have to a person of ordinary skill in the art in question at the time of the INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 13

invention.” Phillips v. AWH Corp., 415 F.3d 1303, 1312– 13 (Fed. Cir. 2005) (en banc). To determine the ordinary meaning, we look to the claim language, the specification, the prosecution history, and, where necessary, extrinsic ev- idence. Id. at 1314, 1319. A. “communicated through a communication channel to accommodate the processing of the purchase request,” and related terms The dispute regarding this term centers around whether claims 28, 35, and 52 each require a wireless de- vice that both transmits an item status signal and com- municates information for the processing of a purchase request. The district court concluded that it does. Claim 28 recites “information of a user account is communicated through a communication channel to accommodate the pro- cessing of the purchase request.” Claim 35 recites “at least one output interface configured to communicate the infor- mation for the processing of the purchase request through a communication channel to accommodate a completion of the processing of the purchase request.” Claim 52 recites “communicating information for a processing of the pur- chase request through a communication channel to accom- modate a completion of the processing of the purchase request.” The district court construed the claimed commu- nication in each of the claims as “transmitting information from the wireless device to process the purchase request.” J.A. 44. Innovation Sciences challenges the district court’s treatment of each of claims 28, 35, and 52 as having the same construction. It points out that claim 28 is the only claim of the three that recites a “wireless device.” It distin- guishes claim 28’s recitation of a “wireless device” from claims 35 and 52, which do not specify whether a single de- vice transmits both an item status signal and information for the processing of a purchase request. It argues the dis- trict court’s construction of claims 35 and 52 excludes the 14 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

exemplary embodiment in Fig. 8, which the court recog- nized. Amazon contends that the claims envision a single wireless device that monitors the condition of merchandise, sends an item status signal, and sends a purchase request, even if the specification does not disclose such an embodi- ment. It argues claim 28 requires a “wireless device,” and claims 35 and 52 “recite a system and method, respectively, corresponding to the device claimed by claim 28.” Appel- lee’s Br. 39–40. According to Amazon, the “communication channel” must originate from the wireless device because, in describing the “present invention,” the specification states that “the wireless HUB establishes a secure commu- nication channel with the user equipment, based upon the recognition of the unique identifier,” arguing that “the user equipment” refers to the wireless device. Appellee’s Br. 40 (quoting ’844 patent at 2:48–54). We agree with the district court and Amazon that claim 28 is limited to a single “wireless device.” The preamble of claim 28 recites “[a] wireless device configured to facilitate electronic communication of information,” and the remain- der of the claim makes clear that the claim is directed to that wireless device. This is in conflict with what is de- scribed in specification, which, as the district court pointed out, “contemplates two separate devices to (1) monitor the merchandise and send status updates and (2) initiate the purchase requests.” J.A. 39. The only embodiment that discloses both the monitoring of the merchandise and the initiation of a purchase request occurs in the specification’s discussion of Fig. 8. This embodiment discloses a “diaper condition sensing module” (“DCSM”) that detects a wet di- aper and wirelessly sends a signal to a wireless HUB when the diaper is wet. ’844 patent at 9:65–10:32, 12:34–36. The wireless HUB manages the diaper inventory and alerts a user when the inventory is low. Id. at 12:20–30, 12:44–46. The user can then carry out a purchase request by directly interfacing with the wireless HUB or using user INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 15

equipment, such as a cellular phone, to send the purchase request to the wireless HUB. Id. at 12:46–51. This embod- iment thus contemplates the use of two devices in its sys- tem: a DCSM and user equipment. The district court correctly determined that claim 28 is not directed to this embodiment, as it requires a single “wireless device.” Claims 35 and 52, however, are system and method claims, respectively, and are not so limited. They do not specifically recite the “wireless device” limitation that the district court included in its claim construction. Instead, they recite a “wireless signal transmitter” that transmits an item status signal and an unknown component, having an “output interface” in the case of claim 35, that communi- cates the information for the processing of the purchase re- quest through a communication channel. In the context of the diaper embodiment, the wireless signal transmitter is part of the DCSM. See id. at Fig. 4. But nothing in the claims or the specification requires a wireless device that both includes the wireless signal transmitter and com- municates the information for the processing of the pur- chase request. Additionally, nothing limits the claimed “communication channel” to the communication channel between the user equipment and wireless HUB discussed in the context of the embodiment in Figs. 3 and 4. Claims 35 and 52, for example, permit the wireless HUB to communicate the information for the processing of the purchase request. In contrast to claim 28, claims 35 and 52 require that the communication of this information through the communication channel “accommodate[s] a completion of the processing of the purchase request.” The specification indicates that to “complete the transaction,” payment and, in some cases, the shipping address are sent from the wireless HUB to a local merchant server. ’844 patent at 12:58–63; see also id. at 2:62–67. The specifica- tion also permits an embodiment in which the purchase re- quest is made directly from the wireless HUB. Id. at 12:48–49 (“When the user is ready to make a purchase, this 16 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

may be accommodated via the [wireless HUB]. This pur- chase request may be made by directly interfacing with the [wireless HUB] . . . .”). Claims 35 and 52 thus do not re- quire “transmitting information from the wireless device to process the purchase request,” as the district court con- cluded. J.A. 44 (emphasis added). The district court rejected this reading of the claims be- cause, in its view, “[t]he specification does not shed any light on the issue of how a human ‘interfaces’ with the [wireless HUB] without using some sort of equipment.” J.A. 44. According to the district court, “a human user would need some sort of digital tool to interface with this device,” so the ability to make a purchase request directly from the wireless HUB “does not appear to be grounded in reality.” J.A. 44. It thus concluded that “the user must interface with the [wireless HUB] through the user equip- ment or the DSCM.” J.A. 44. The intrinsic evidence does not support this construction. The specification discusses the wireless HUB in gen- eral terms. It may be a kiosk that is located anywhere “that is perceived as convenient and likely to include user traffic.” ’844 patent at 7:57–61. Alternatively, it could be “configured for usage in locations like homes or hotel rooms” and “may be provided in a smaller device such as part of a Set Top Box.” Id. at 7:61–65. The specification states that kiosks and set top boxes are both examples of user equipment. Id. at 4:33–36. The district court erred in its determination that a user could not directly interface with a wireless HUB, as the specification provides other- wise. To be sure, the claims are not a model of clarity and stray from the embodiments described in the specification. We do not express an opinion as to whether they satisfy the requirements of § 112. We conclude, however, that the dis- trict court erred when it held that claims 35 and 52 require that the same wireless device that transmits an item status INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 17

signal also communicates the information for the pro- cessing of the purchase request. B. “item status signal” The district court construed an “item status signal” as “a signal conveying information regarding the status of an item.” J.A. 31. Innovation Sciences argues that this con- struction improperly implies that the signal contains some particular content. It argues that the signal need not carry any information other than a unique identifier because its mere existence can convey the necessary information when a sensor only monitors one condition. It points to an em- bodiment in the specification in which a DCSM uses an RFID tag to transmit an item status signal. But as Ama- zon points out, “[e]ven if the item status signal of the patent consists of an RFID ID, it reflects the ‘item status’ of the diaper being monitored by that diaper probe sensor.” Ap- pellee’s Br. 35. We see no merit to Innovation Sciences’ ar- guments and agree with the district court’s construction. C. “an updated condition of a merchandise” The district court construed “an updated condition of a merchandise” as “a detected change in the condition of an item.” J.A. 34. Innovation Sciences argues this construc- tion improperly equates updates with changes in a condi- tion. It points to the specification’s disclosure that the DCSM may be polled “after a given period of time to ensure that the diaper condition has been updated,” ’844 patent at 11:47–49, as evidence that detecting an event is not neces- sarily required to update a status. We find Innovation Sciences’ contentions unpersua- sive. In the context of the specification, “an updated condi- tion of a merchandise” means that the condition of the merchandise has changed. The specification only describes sending an item status signal when the condition has changed. See, e.g., id. at 3:3–5 (“A sensor detects the con- dition of the diaper and accommodates a status indication 18 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

when the current indication requires an update[].”), 11:26– 31 (“The process 700 commences with the DCSM sensor monitoring 702 the diaper condition. When the diaper con- dition changes, such as when it is wet, the DCSM sensor detects the updated condition of the diaper” and “sends 704 the diaper condition update to the CRC.”). This makes sense in the context of the claims. As a matter of common sense, it is unclear why an item status signal indicating no change in the condition of a merchandise would then prompt a purchase request for the merchandise. We agree with the district court’s construction. D. “the merchandise” The district court construed “the merchandise” as “the specific item for which a change in condition is detected.” J.A. 36. Innovation Sciences argues this construction ren- ders superfluous the language “updated condition of a mer- chandise.” It argues the plain and ordinary meaning of the term should control. We see no error in the district court’s claim construction. It simply clarifies that the antecedent basis for “the merchandise” is the merchandise for which the item status signal was sent. E. Summary We agree with the district court’s constructions for in- dependent claim 28. Accordingly, we affirm the district court’s judgment of noninfringement with respect to claim 28 and the asserted claims that depend from claim 28. As for independent claims 35 and 52, we agree with the dis- trict court as to three of the four claim constructions that Innovation Sciences appealed. Where, as here, the patent owner must show that the accused products satisfy each limitation to prevail on infringement, losing on three of four appealed claim constructions would typically be dis- positive. Given the stipulation in this case, however, we must vacate and remand. INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 19

Innovation Sciences stipulated to noninfringement and reserved its right to appeal the district court’s claim con- structions. The stipulation does not make clear whether it is based on one term or all four that were appealed. Coun- sel for Innovation Sciences was repeatedly prompted to ex- plain how Innovation Sciences could prevail below on infringement under the district court’s constructions of “item status signal,” “an updated condition of a merchan- dise,” and “the merchandise.” He acknowledged that pre- vailing would be “a challenge,” Oral Argument 37:35–42, but maintained that remand was necessary, id. at 33:01– 12 (Counsel: “Because there wasn’t a segregation of which claim term was dispositive—whether it required all of them—I think it has to be remanded to the district court for further consideration.”). He held this position without being able to articulate Innovation Sciences’ infringement position under the district court’s constructions that we af- firm. Id. at 34:13–36 (Judge: “What would be your infringe- ment theory for [Amazon’s] Dash Button when the claim requires the item status signal to provide information about a detection of a change in condition of the merchan- dise?”; Counsel: “That’s, frankly, a hypothetical I haven’t considered prior to today.”). Because we cannot tell whether our affirmance of three of the four appealed con- structions is dispositive, we are left with no choice but to remand to the district court for further proceedings. III. The ’398 Patent The ’398 patent relates to “providing multimedia con- tent to and from various different devices.” ’398 patent at 1:47–49. Innovation Sciences asserted claims 1–2, 14, 16, 17, 20, 23–24, 31, 35, 37, 42–43, 47–48, and 53 of the ’398 patent. Claims 1 and 14 are the only independent claims asserted. Claim 1 recites: 1. A method for conversion and sending of content to devices, the method comprising: 20 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

receiving a multimedia content item origi- nated from a source located outside a home location and destined for a destination de- vice located within the home location, wherein the multimedia content item is re- ceived through a wireless communication network and from a wireless terminal de- vice; converting the multimedia content item for reproduction according to a determined sig- nal format of the destination device; and sending the converted multimedia content item to the destination device, wherein the destination device is a television, and wherein the sending comprises: establishing a predetermined channel op- eratively in communication with the desti- nation device and transporting the multimedia content item to the destination device via said pre- determined channel, for the destination device to display the multimedia content item in conjunction with a navigational command to the desti- nation device for the predetermined chan- nel. Id. at Claim 1. Claim 14 is a “non-transitory computer readable medium” claim that is otherwise identical to claim 1, except it recites a “designated location” instead of a “home.” Following claim construction, the district court granted summary judgment that Amazon does not infringe the asserted claims. Innovation Sciences challenges the district court’s con- struction of a multimedia content item “destined for a INNOVATION SCIENCES, LLC v. AMAZON.COM, INC. 21

destination device located within the home/designated lo- cation.” In construing this term, the district court deter- mined that “the destination device is determined before the media content is received by the mobile terminal device.” J.A. 12. It construed this term as a multimedia content item “directed to a destination device within the home/des- ignated location.” J.A. 15. Innovation Sciences argues that “destination” refers to any device within the home that will ultimately receive the content, not a specific destination device. We see no error in the district court’s construction. Claim 1, which is illustrative, recites “receiving a multime- dia content item originated from a source located outside a home location and destined for a destination device located within the home location.” The multimedia content item “is received through a wireless communication network and from a wireless terminal device.” The next step recites “converting the multimedia content item for reproduction according to a determined signal format of the destination device.” The claim thus recites a multimedia content item that passes from outside the home, through a wireless com- munication network, and through a wireless terminal de- vice before it is “received” at an unspecified conversion module. The claim makes clear that the multimedia con- tent item is “destined for a destination device” as it is trans- mitted through the wireless communication network. Nothing in the claims or the specification supports Innova- tion Sciences’ argument that the final destination need not be set until it reaches the wireless terminal device. Accord- ingly, we agree with the district court’s construction. Because this term appears in all of the ’398 patent claims at issue and Innovation Sciences does not argue that summary judgment of noninfringement was improper un- der the district court’s construction of this term, our affir- mance of this construction is dispositive. We affirm the grant of summary judgment of noninfringement based on the district court’s uncontested determination that the 22 INNOVATION SCIENCES, LLC v. AMAZON.COM, INC.

accused products do not satisfy the term “destined for a destination device located within the home/designated lo- cation” under the proper construction. We need not reach Innovation Sciences’ separate arguments that the district court misconstrued “multimedia content item” and that, even under the district court’s construction of “multimedia content item,” genuine disputes of material fact exist as to whether the accused products satisfy this term. CONCLUSION We have considered Innovation Sciences’ other argu- ments and find them unpersuasive. We affirm the grant of summary judgment that claim 17 of the ’140 patent is inel- igible under § 101. We affirm the judgment of noninfringe- ment as to claims 28–34 of the ’844 patent, but we vacate the judgment of noninfringement as to claims 35–60 be- cause the stipulation does not specify whether our affir- mance of all but one of the appealed constructions is dispositive. We affirm the grant of summary judgment of noninfringement as to claims 1–2, 14, 16, 17, 20, 23–24, 31, 35, 37, 42–43, 47–48, and 53 of the ’398 patent. AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED COSTS Costs to Amazon.