Koninklijke Kpn N v. v. Gemalto M2m Gmbh

• Court: Court of Appeals for the Federal Circuit
• Decided: November 15, 2019
• Docket: 18-1863
• Status: Published

Opinion

United States Court of Appeals for the Federal Circuit ______________________

KONINKLIJKE KPN N.V., Plaintiff-Appellant

v.

GEMALTO M2M GMBH, GEMALTO INC., GEMALTO IOT LLC, TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED, TCL COMMUNICATION, INC., TCT MOBILE (US) HOLDINGS, INC., TCT MOBILE (US) INC., TCT MOBILE, INC., TELIT WIRELESS SOLUTIONS, INC., Defendants-Appellees

LG ELECTRONICS, INC., Intervenor ______________________

2018-1863, 2018-1864, 2018-1865 ______________________

Appeals from the United States District Court for the District of Delaware in Nos. 1:17-cv-00086-LPS, 1:17-cv- 00091-LPS, 1:17-cv-00092-LPS, Chief Judge Leonard P. Stark. ______________________

Decided: November 15, 2019 ______________________

ANDRES HEALY, Susman Godfrey LLP, Seattle, WA, ar- gued for plaintiff-appellant. Also represented by HUNTER 2 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

VANCE, ALEXANDRA GISELLE WHITE, Houston, TX; LAWRENCE PERLEY COGSWELL, III, Hamilton, Brook, Smith & Reynolds, PC, Boston, MA; TIMOTHY JOSEPH MEAGHER, Concord, MA.

BRIAN ROSENTHAL, Gibson, Dunn & Crutcher LLP, New York, NY, argued for all defendants-appellees and in- tervenor. Defendants-appellees Gemalto M2M GmbH, Ge- malto Inc., Gemalto IOT LLC, also represented by BRIAN ANDREA, Washington, DC.

WILLIAM R. PETERSON, Morgan, Lewis & Bockius LLP, Houston, TX, for defendants-appellees TCL Communica- tion Technology Holdings Limited, TCL Communication, Inc., TCT Mobile (US) Holdings, Inc., TCT Mobile (US) Inc., TCT Mobile, Inc. Also represented by JULIE S. GOLDEMBERG, Philadelphia, PA; BRADFORD CANGRO, HANG ZHENG, Washington, DC.

DAVID A. LOEWENSTEIN, Pearl Cohen Zedek Latzer LLP, New York, NY, for defendant-appellee Telit Wireless Solutions, Inc. Also represented by CLYDE SHUMAN, GUY YONAY.

CARTER GLASGOW PHILLIPS, Sidley Austin LLP, Wash- ington, DC, for intervenor. Also represented by RYAN C. MORRIS; PETER H. KANG, Palo Alto, CA. ______________________

Before DYK, CHEN, and STOLL, Circuit Judges. CHEN, Circuit Judge. Plaintiff-Appellant Koninklijke KPN N.V. (KPN) owns U.S. Patent No. 6,212,662 (’662 patent). KPN sued Ge- malto M2M GmbH, Gemalto Inc., Gemalto IOT LLC, TCL Communication Technology Holdings Limited, TCL Com- munication, Inc., TCT Mobile, Inc., TCT Mobile (US) Inc., TCT Mobile (US) Holdings, Inc., and Telit Wireless KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 3

Solutions, Inc. (collectively “Appellees”) for infringement of the ’662 patent in the United States District Court for the District of Delaware. Appellees moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) al- leging that all four claims (claims 1–4) of the ’662 patent were ineligible under 35 U.S.C. § 101. The district court granted Appellees’ motion with respect to all four claims, concluding that the claims recite no more than mere ab- stract data manipulation operations, such as “reordering data and generating additional data.” J.A. 23. On appeal, KPN only challenges the district court’s ineligibility deci- sion with respect to dependent claims 2–4. As to these ap- pealed claims, we reverse. Rather than being merely directed to the abstract idea of data manipulation, these claims are directed to an improved check data generating device that enables a data transmission error detection sys- tem to detect a specific type of error that prior art systems could not. In data transmission systems, it is common to generate something called “check data” to check whether data was accurately transmitted over a communications channel. Check data is generated based on the original data and thus serves as a shorthand representation of a particular block of data. By comparing the check data generated at both ends of the communication channel, error detection systems may be able to infer whether errors occurred dur- ing transmission. For example, if the check data from both ends match, the system infers that the content of the re- ceived data block is the same as what was transmitted and thus concludes that no errors occurred during transport. But, as the ’662 patent recognizes, matching check data is not always a reliable indicator of accurate data transmis- sions. According to the patent, certain generating func- tions coincidentally produce the same check data for a corrupted data block and an uncorrupted data block. When this happens, the check data is functionally defective, be- cause the system will mistakenly believe that there were 4 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

no errors in the data transmission. The problem of defec- tive check data is aggravated for a particular type of per- sistent error, i.e., “systematic error,” that repeats across data blocks in the same way. According to the ’662 patent, prior art error detection systems were unable to reliably detect systematic errors. Once the prior art system gener- ated defective check data for an initial data block with a given systematic error, the system would continue to gen- erate defective check data for subsequent data blocks with the same systematic error, thus allowing these types of er- rors to persist in the system. The ’662 patent solves this problem by varying the way check data is generated by varying the permutation ap- plied to different data blocks. Varying the permutation for each data block reduces the chances that the same system- atic error will produce the same defective check data across different data blocks. Claims 2–4 thus replace the prior art check data generator with an improved, dynamic check data generator that enables increased detection of system- atic errors that recur across a series of transmitted data blocks. As with other claims we have found to be patent- eligible in prior cases, the appealed claims represent a non- abstract improvement in the functionality of an existing technological process and not simply an abstract idea of manipulating data. Accordingly, we reverse the district court’s grant of Appellees’ Rule 12(c) motion that claims 2– 4 are ineligible on the pleadings. TECHNOLOGY BACKGROUND In order to physically transmit information over the air from a transmitter to a receiver, that information is en- coded as a series of electromagnetic pulses representing “0s” and “1s” of binary code, packaged into a series of indi- vidual data blocks. As the information travels through the air, different types of environmental factors may impact the transmission of data in different ways. Whereas vari- able changes in the environment may cause random errors KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 5

to appear in different data blocks, persistent properties in the environment, such as an “interference signal with a certain frequency” or “equipment error,” may cause certain errors to repeat themselves across each data block in the same way. ’662 patent at col. 1, ll. 48–52. This type of persistent error, called a “systematic error,” is the focus of the ’662 patent. A. Prior Art Check Data Generators Conventional prior art systems detected errors in data transmissions by generating something called “check data” (or “supplementary data”). Id. at col. 1, ll. 10–46, col. 3, ll. 32–33. Check data is a short piece of information that is generated from the original data using a generating func- tion. Id. at col. 1, ll. 55–56, col. 2, ll. 31–34. As such, check data effectively serves as a short-hand representation of the content of the original data prior to transmission. Dur- ing a data transmission, check data is attached to the orig- inal data of each data block as a “redundant” piece of information to enable the detection of transmission errors by the receiver. Id. at col. 1, ll. 34–37. Since a receiver cannot easily tell whether a received transmission has been corrupted by looking at the data directly, it uses the appended check data as a reference point for determining whether errors were introduced during transport. See id. at col. 1, ll. 37–46. To do so, the receiver compares the ap- pended check data generated based on the original data (which we refer to as “d1”) with the check data generated based on the received transmission (which we refer to as “d2”). Id. at col. 3, ll. 39–41. If check data d1 does not match check data d2, the receiver infers that the data used to generate check data d2 has changed during transmission from the uncorrupted data used to generate check data d1. Id. at col. 3, ll. 43–46. This means that errors were intro- duced into the original data during transmission. Id. How- ever, if check data d1 matches check data d2, the system infers that there were no errors. Id. at col. 3, ll. 41–43. 6 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

But a match in check data does not necessarily mean that the original data was accurately transmitted. As noted by the ’662 patent, “there is always a probability that erroneous data are considered to be correct data because the [check] data may be correct by coincidence.” Id. at col. 1, ll. 52–55. That is because check data is “restricted in length and therefore a finite number of [check] data can be distinguished.” Id. at col. 1, ll. 55–57. As a result, the same check data may be generated for a transmission with errors and another transmission without. This problem of defec- tive check data is aggravated for a particular type of error called a “systematic error.” Unlike random errors, system- atic errors are “errors that repeat themselves” due to a per- sistent property in the channel, such as an “interference signal with a certain frequency” or “equipment error.” Id. at col. 1, ll. 48–52. According to the ’662 patent, prior art methods did not reliably detect systematic errors, which “may result in all decompressed data becoming unusable.” Id. at col. 1, ll. 47–48, col. 2, ll. 12–16. B. Solution of the ’662 Patent The inventors of the ’662 patent recognized that the rea- son why systematic errors were able to persist undetected was because the prior art used the same, or “fixed,” gener- ating function to process every block of data. Id. at col. 2, ll. 48–50. If a fixed generating function produced defective check data for a transmission that was corrupted with a given systematic error (e.g., first and fourth bit is errone- ous in every data transmission), that fixed generating func- tion would likely continue to produce the same defective check data every time that systematic error appeared. As a result, a “[systematic] error once not recognized as such, [wa]s continually not detected.” Id. at col. 1, ll. 57–59. To solve the problem of undetected systematic errors in the prior art systems, the inventors of the ’662 patent de- veloped a method that varies the way check data is gener- ated from time to time so that the same defective check KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 7

data does not continue to be produced for the same type of persistent systematic error. Id. at col. 2, ll. 42–47. This way, “a variable checking function can almost always pre- vent the non-detection of repetitive errors.” Id. at col. 2, ll. 51–53. The ’662 patent discusses different ways of varying the way check data is generated to achieve this increased de- tection capability. One way is by varying the generating function used to produce the check data. For example, “[i]t is possible to vary the function completely for every n bits” by “loading a new algorithm (function f).” Id. at col. 4, ll. 56–57. Another way to vary the generated check data is to vary the original data before it is fed into the generating device. The ’662 patent discusses different ways to accom- plish this. In one embodiment, a “random number genera- tor” is used that “adds random numbers to the user data.” Id. at col. 3, l. 66 – col. 4, l. 2. In another embodiment, the original data is varied through “permutation,” which “in- terchange[s] the bit position in a data block.” Id. at col. 5, ll. 60–61. One example of a permutation may involve the following: “bit 1 to position 2, bit 2 to position 4, bit 3 to position 1 and bit 4 to position 3.” Id. at col. 5, ll. 60–63. Based on this permutation, a data block of “1100” would transform into “0101.” The appealed claims are limited to this last embodi- ment. Given that they all incorporate independent claim 1, all four claims of the ’662 patent are reproduced below. 1. A device for producing error checking based on original data provided in blocks with each block having plural bits in a particular ordered se- quence, comprising: a generating device configured to generate check data; and 8 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

a varying device configured to vary original data prior to supplying said original data to the generating device as varied data; wherein said varying device includes a per- mutating device configured to perform a permutation of bit position relative to said particular ordered sequence for at least some of the bits in each of said blocks mak- ing up said original data without reorder- ing any blocks of original data. 2. The device according to claim 1, wherein the varying device is further configured to modify the permutation in time. 3. The device according to claim 2, wherein the varying is further configured to modify the per- mutation based on the original data. 4. The device according to claim 3, wherein the permutating device includes a table in which subsequent permutations are stored. Id. at claims 1–4 (emphases added). As recited above, the device of claim 2 varies the way check data is generated by applying a different permuta- tion to different data blocks. Claim 3, which depends from claim 2, further recites how the permutation is modified (i.e., “based on the original data”). Claim 4, which depends from claim 3, even further specifies that different permu- tations are stored in a table. By varying the original data supplied to the check data generator in different ways, the device of the appealed claims significantly decreases the likelihood that defective check data will be generated for successive data blocks such that a given systematic error would continue to escape detection. See id. at col. 2, ll. 42– 47. KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 9

DISTRICT COURT’S INELIGIBILITY DECISION The district court granted Appellees’ motion for judg- ment on the pleadings under Rule 12(c) alleging that all four claims (claims 1–4) of the ’662 patent are ineligible un- der § 101. J.A. 9. Applying the two-step framework laid out in Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), the district court found all claims of the ’662 patent to be ineligible because they are directed to an abstract idea and contain no saving inventive concept. Though KPN now appeals the ineligibility decision only for dependent claims 2–4, the focus of the district court’s analysis was on independent claim 1. At step one of Alice, the district court found that the claims were directed to the “abstract idea of reordering data and generating additional data,” likening the asserted claims to data manipulation claims found ineligible in Two- Way Media Ltd. v. Comcast Cable Communications, LLC, 874 F.3d 1329 (Fed. Cir. 2017), RecogniCorp, LLC v. Nin- tendo Co., 855 F.3d 1322 (Fed. Cir. 2017), Intellectual Ven- tures I LLC v. Capital One Financial Corp., 850 F.3d 1332 (Fed. Cir. 2017) (“Intellectual Ventures”), and Digitech Im- age Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014). J.A. 23. Based on these cases, the district court explained that the claims of the ’662 pa- tent are abstract because they do “not say how data is re- ordered, how to use reordered data, how to generate additional data, how to use additional data, or even that any data is transmitted.” J.A. 8. The district court re- peated a similar concern for the dependent claims, explain- ing that they do “not say how the permutations are modified in time or modified based on the data.” J.A. 24. At step two of Alice, the district court entertained the possibility that patent-eligible subject matter is recited in the specification, but ultimately concluded that the claims are ineligible because KPN’s “purported inventive concept 10 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

[was] not captured in the claims.” J.A. 26–27 (emphasis in original). KPN timely appealed the district court’s ineligibility decision with respect to dependent claims 2–4, not inde- pendent claim 1. 1 We have jurisdiction under 28 U.S.C. § 1295(a)(1). STANDARD OF REVIEW We review the district court’s grant of judgment on the pleadings under Rule 12(c) by following the procedural law of the regional circuit. Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir. 2011). Under Third Circuit law, we have “plenary review” of the district court’s order dismissing KPN’s claims pursuant to Rule 12. Green v. Fund Asset Mgmt., L.P., 245 F.3d 214, 220 (3d Cir. 2001). Under this standard, we must “view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the . . . non-moving party” (KPN) and “affirm the [d]istrict [c]ourt’s judgment only if the plaintiffs would not be entitled to relief under any set of facts that could be proved.” Id. Patent eligibility under § 101 is a question of law that may contain underlying issues of fact. Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1342 (Fed. Cir. 2018) (cit- ing Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 2018)). We review an ultimate conclusion on patent eligi- bility de novo. Id. DISCUSSION Section 101 defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement

1 KPN states that it “statutorily disclaimed Claim 1 for reasons unrelated to this appeal.” Appellant’s Br. at 15 n.5. KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 11

thereof.” 35 U.S.C. § 101. Laws of nature, natural phe- nomena, and abstract ideas, however, are not patentable. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70–71 (2012). These categories of subject matter have been excluded from patent-eligibility because they represent “the basic tools of scientific and technological work.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013). The “concern that drives this exclusionary principle [is] one of pre-emption.” Alice, 573 U.S. at 216. To determine whether claimed subject matter is patent-eligible, we apply the two-step framework explained in Alice, id. at 218. First, we “determine whether the claims at issue are directed to a patent-ineligible con- cept” such as an abstract idea. Id. Second, if so, we “exam- ine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.” Id. at 221 (quoting Mayo, 566 U.S. at 72, 80). At step one of the Alice framework, we “look at the fo- cus of the claimed advance over the prior art to determine if the claim’s character as a whole is directed to excluded subject matter.” Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (internal quota- tion marks omitted). “In cases involving software innova- tions, this inquiry often turns on whether the claims focus on ‘the specific asserted improvement in computer capabil- ities . . . or, instead, on a process that qualifies as an ab- stract idea for which computers are invoked merely as a tool.’” Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018) (quoting Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016) (internal quotation marks omitted)). Since Alice, we have found soft- ware inventions to be patent-eligible where they have made non-abstract improvements to existing technological processes and computer technology. See McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1313–16 (Fed. Cir. 2016) (claims directed to a process for lip- 12 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

synching animated characters that used specific rules to automate a previously subjective manual process); Enfish, 822 F.3d at 1337–39 (claims directed to a self-referential database that improved the way computers stored and re- trieved data in memory); Finjan, 879 F.3d at 1304–06 (claims directed to generating a security profile that im- proved the ability of a computer system to identify poten- tially suspicious operations that it could not previously identify before); Ancora Techs. Inc. v. HTC America Inc., 908 F.3d 1343, 1347–49 (Fed. Cir. 2018) (claims directed to storing a verification structure in a part of computer memory that is less vulnerable to hacking to improve secu- rity against unauthorized use of licensed software). An improved result, without more stated in the claim, is not enough to confer eligibility to an otherwise abstract idea. Finjan, 879 F.3d at 1305 (stating that as a “founda- tional patent law principle,” “a result, even an innovative result, is not itself patentable”). To be patent-eligible, the claims must recite a specific means or method that solves a problem in an existing technological process. Compare Affinity Labs, 838 F.3d at 1258 (finding claims related to wirelessly communicating regional broadcast content were directed to an ineligible abstract idea because “nothing in claim 1 . . . is directed to how to implement out-of-region broadcasting on a cellular telephone”), and Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1316 (Fed. Cir. 2016) (finding claims related to email filtering were directed to an ineligible abstract idea where there was “no restriction on how the result is accomplished” and the “mechanism . . . is not described”), with McRO, 837 F.3d at 1307, 1313–14 (finding claims to be directed to a patent- eligible non-abstract improvement in an existing techno- logical process because the claims recited “specific” rules that allowed automation of a previously manual process of lip synching three-dimensional animated characters). In accordance with the above precedents, we conclude that appealed claims 2–4 of the ’662 patent are patent- KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 13

eligible because they are directed to a non-abstract im- provement in an existing technological process (i.e., error checking in data transmissions). By requiring that the per- mutation applied to original data be modified “in time,” claim 2, which is incorporated into all appealed claims, re- cites a specific implementation of varying the way check data is generated that improves the ability of prior art er- ror detection systems to detect systematic errors. See ’662 patent at col. 2, ll. 51–53. This claimed technological improvement is akin to the type of non-abstract improvement we found to be patent- eligible in Finjan. In Finjan, the claims at issue recited a method of providing computer security by generating a “se- curity profile” that identifies suspicious code that performs “potentially hostile operations.” 879 F.3d at 1303–04. Un- like traditional systems that “simply look[ed] for the pres- ence of known viruses,” the claimed method was able to identify “potentially dangerous or unwanted operations. Id. at 1304 (emphases added). Thus, we concluded that the claimed method was directed to a “non-abstract improve- ment” over the prior art because it employed “a new kind of file that enable[d] a computer security system to do things it could not do before.” Id. at 1305. Here, as in Fin- jan, the claimed invention is also directed to a non-abstract improvement because it employs a new way of generating check data that enables the detection of persistent system- atic errors in data transmissions that prior art systems were previously not equipped to detect. Appellees argue that the claims are ineligible because they fail to recite a last application step that uses the gen- erated check data to actually perform error detection. Ac- cording to Appellees, without this last step tying the claims to a “concrete application,” the claims are doomed to ab- straction. Appellees’ Br. at 18–21. We disagree. A claim that is directed to improving the functionality of one tool (e.g., error checking device) that is part of an 14 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

existing system (e.g., data transmission error detection system) does not necessarily need to recite how that tool is applied in the overall system (e.g., perform error detection) in order to constitute a technological improvement that is patent-eligible. Rather, to determine whether the claims here are non-abstract, the more relevant inquiry is “whether the claims in th[is] patent[ ] focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke processes and machinery.” McRO, 837 F.3d at 1314; cf. Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (finding claims to be directed to a patent-ineligible abstract idea be- cause “the focus of the claims [wa]s not on such an improve- ment in computers as tools, but on certain independently abstract ideas that use computers as tools”). In the present case, the appealed claims recite a suffi- ciently specific implementation (i.e., modifying the permu- tation applied to the original data “in time”) of an existing tool (i.e., check data generating device) that improves the functioning of the overall technological process of detecting systematic errors in data transmissions. See McRO, 837 F.3d at 1313–16; Ancora, 908 F.3d at 1348–49. Im- portantly, the claims do not simply recite, without more, the mere desired result of catching previously undetectable systematic errors, but rather recite a specific solution for accomplishing that goal—i.e., by varying the way check data is generated by modifying the permutation applied to different data blocks. Id. at 1349; Finjan, 879 F.3d at 1305–06; SAP America Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018). In so doing, the claims suffi- ciently capture the inventors’ asserted technical contribu- tion to the prior art by reciting how the solution specifically improves the function of prior art error detection systems. Importantly, Appellees do not dispute that varying the way check data is generated provides an improvement to an existing technological process. Rather, their main KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 15

argument is that this improvement is not adequately cap- tured in the claims because the claims fail to tie the per- mutated data with the generation of new check data. Oral Arg. at 23:02–32; Appellees’ Br. at 29–34. We disagree. The appealed claims require that a “varying device” be configured to “vary original data prior to supplying said original data to the generating device as varied data,” and that the “generating device” be configured to “generate check data.” ’662 patent at claim 1 (emphasis added). In a “wherein” clause, claim 1 specifies how the original data is varied by the varying device: by including a “permutating device configured to perform a permutation” on the bits in each block making up “said original data.” Id. Thus, con- trary to Appellees’ proposed reading, claim 1 logically re- quires that original data be varied by permutation before being supplied to the generating device as “varied data.” Appellees further contend that even if the claims con- nect the permutated data with the generation of check data, the appealed claims are not directed to a patent-eli- gible technological improvement because the specification does not mention any technological benefit of using permu- tations to generate check data. 2 But, even assuming that the law required the specification to discuss a technological benefit of the purported invention, as Appellees suggest, Appellees’ argument still fails because it does not account for the specification as a whole. The specification states that “a variable checking function,” as opposed to a “normal (fixed) checking function,” “can almost always prevent the non-detection of repetitive errors.” ’662 patent at col. 2, ll.

2 Though Appellees contend that KPN waived its ar- gument that the specification discusses the technological benefits of the dependent limitations of claims 2–4, Appel- lees’ Br. at 35, we believe that it was adequately preserved in KPN’s Opposition Brief to Defendant’s 12(c) motion. See J.A. 428–49, 438. 16 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

48–53. In a later section, it states that one way of providing a “variation value” is to use “different permutations.” Id. at col. 5, l. 65 – col. 6, l. 2. Thus, a review of the specifica- tion makes clear that modifying the permutation in time provides the technological benefit of preventing non-detec- tion of repetitive errors, just like other variable generating functions. Appellees contend that the district court correctly found that the claims on appeal are similar to the abstract “data manipulation” claims that we have held to be ineligi- ble in prior cases. Appellees’ Br. at 27–29. We disagree. While the claims in those cases were arguably related to advances in computer technology, none were limited to a specific improvement in computer functionality. Absent sufficient recitation of how the purported invention im- proved the functionality of a computer, the “improvement” captured by those claims was recited at such a level of re- sult-oriented generality that those claims amounted to a mere implementation of an abstract idea on a computer, not the specific way to improve the functionality of a com- puter. See Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016). While the patents in these cases may have claimed an improved result in a tech- nical field, the claims failed to recite a specific enough so- lution to make the asserted technological improvement concrete. For example, in Digitech, the patented invention pur- portedly solved the problem of distortion that occurred when translating the display of an image from a source de- vice to a different output device. 758 F.3d at 1347–48. The claimed solution took various device-dependent infor- mation and “combin[ed]” them into a “device profile.” Id. at 1351. Though the specification discussed using this de- vice profile to correct for device-specific image distortions, id. at 1347–48, this asserted improvement in image pro- cessing was not specifically captured in the claims. In the KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH 17

preamble, the claimed method stated that the “device pro- file” was used “for capturing, transforming, or rendering an image.” Id. at 1351. But in the body, the claimed method failed to explain how the device-dependent information was actually used by the recited mathematical correlation to accomplish image distortion correction. Id. at 1350–51. Absent further elaboration, the claims were too abstract to capture the inventors’ purported technical contribution in correcting image distortion. As such, the claims amounted to no more than “taking existing information . . . and or- ganizing this information into a new form.” Id. at 1351. In RecogniCorp, the inventors purported to solve the problem of encoding images in a way that required “less memory and bandwidth.” 855 F.3d at 1324. While the claims used an “image code” to reproduce an image based on a mathematical operation, id., they did not adequately capture the inventors’ asserted technical contribution, be- cause the claims recited no more than “standard encoding and decoding, an abstract concept long utilized to transmit information.” Id. at 1326 (emphasis added). Thus, we found that the claims merely amounted to an ineligible ab- stract process “for which computers are invoked merely as a tool,” not a software invention that actually improved the functioning of a computer. Id. at 1327 (emphasis added) (quoting Enfish, 822 F.3d at 1336). The ineligible claims in Two-Way Media and Intellec- tual Ventures, which are even less similar to the appealed claims, also fail to concretely capture any improvement in computer functionality. In Two-Way Media, we found that the claimed solution merely recited a series of abstract steps (“converting,” “routing,” “controlling,” “monitoring,” and “accumulating records”) using “result-based functional language” without describing how the goal of real-time load balancing was achieved. 874 F.3d at 1337. In Intellectual Ventures, the asserted technological improvement ap- peared to be accomplished by a user interacting with a 18 KONINKLIJKE KPN N.V. v. GEMALTO M2M GMBH

generic user interface, and the claims recited nothing that “improve[d] the functions of the computers itself” or “pro- vide[d] specific programming, tailored software,” or other “meaningful guidance.” 850 F.3d at 1339–42. Like the ineligible claims discussed above, the ap- pealed claims also process data (by reordering information via permutation). However, because these claims specifi- cally recite how this permutation is used (i.e., modifying the permutation applied to different data blocks), and this specific implementation is a key insight to enabling prior art error detection systems to catch previously undetecta- ble systematic errors, ’662 patent at col. 2, ll. 48–53, we conclude that the appealed claims are not directed to an abstract idea because they sufficiently capture the specific asserted improvement in detecting systematic errors con- tributed by the inventors of the ’662 patent.

Having decided that all claims on appeal are not di- rected to an abstract idea at step one of Alice, we need not proceed to a step two analysis. Visual Memory, 867 F.3d at 1262. CONCLUSION For the foregoing reasons, we hold that claims 2–4 are not directed to an abstract idea at step one of Alice. We have considered Appellees’ remaining arguments and find them unpersuasive. Accordingly, we reverse the district court’s grant of Appellees’ Rule 12(c) motion finding that claims 2–4 are ineligible on the pleadings. REVERSED