Glory Licensing and patentable subject matter

The United States District Court of New Jersey recently issued an opinion in Glory Licensing LLC v Toys “R” Us, Inc, Case No. 2-09-cv-04252 (D.N.J. May 16, 2011).  The Plaintiff Glory Licensing LLC  (Glory) brought action alleging three counts of patent infringement.  The defendant Toys “R” Us (TRU) successfully argued that the patents were invalid as they were directed to abstract ideas.  The Court dismissed the infringement action for failure to state a claim.

The Glory patents

Glory is the owner of three US patents 7,570,383 (the ‘383 patent), 7,619,768 (the ‘768 patent) and 7,672, 007 (the ‘007 patent).  The Glory patents protect a system for processing information from a template file to an application program using “content instructions” and “customizable transmission format instructions” on a programmed computer.

Claim 1 of the ‘383 patent, for example, reads:

A method of processing information on a first computer system comprising at least one computer, which comprises:

• receiving a file by transmission from another computer system external to said first computer system and automatically displaying said file on a computer display as a template;
• automatically selecting and extracting information from said file according to content instructions;
• providing utilities capable of automatically routing the extracted information as input information to an unrestricted diversity of application programs according to customizable transmission format instructions tailored to enable correct processing of the input information by any application program that requires said input information;
• transmitting said input information to each application program requiring said input information; and
• automatically processing said input information by said each application program.

Validity of the Glory patents

Section 101, Title 35 provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title”.  Three specific exceptions to patentability include laws of nature, physical phenomena and abstract ideas.

TRU argued that the Glory patents were invalid because they claim abstract ideas.

Machine or apparatus

Glory argued that their claims were patentable because they were tied to a particular machine or apparatus.  Glory said that the claims include a “first computer system”, on which the content instructions and customizable transmission format instructions are programmed and operate.

The Court observed that simply the use of a programmed computer is not sufficient to satisfy the machine or apparatus prong of the test.  Reciting a programmed computer in the claim does not tie the process claim to a particular machine.

Glory attempted to point to something specific in the claim language by the use of “content instructions” and “customizable transmission format instructions”.  The Court observed that the patent specifications contained no information that defines these generic terms, sheds any light on what the instructions entail, nor who programs them according to what specifications.

The Court held that the Glory patents were not tied to a particular machine or apparatus and therefore did not satisfy the machine prong of the “machine or transformation test”.

Transformation

To satisfy the transformation prong of the machine of transformation test, Glory needed to show that its claimed processes transformed an article into a different state or thing.  The transformation needed to be central to the purpose of the claimed process.

The Glory patents claimed processes involving the extraction of information entered into and stored in a document or file and the formatting and transmission of that information to an application program.

The Court observed that the claims in the Glory patents are directed to a “mere transfer” of data from an electronic or hard copy document to an application program.  There was no transformation of the data.  The data was simply transferred from one format to another format.  The data itself remained the same.

Conclusion

The Court held that the Glory patents were addressed to abstract ideas and therefore invalid.  The infringement action was dismissed for failure to state a claim.  It will be interesting to see what happens on appeal.