throbber
No. 20-
`
`In the
`Supreme Court of the United States
`
`CONSUMER 2.0, INC. D/B/A RENTLY,
`
`v.
`
`TENANT TURNER, INC.,
`
`Petitioner,
`
`Respondent.
`
`On PetitiOn fOr a Writ Of CertiOrari frOm the United
`StateS COUrt Of aPPealS fOr the federal CirCUit
`
`PETITION FOR A WRIT OF CERTIORARI
`
`stephen Z. Vegh
`Vegh Ip legAl
`1240 Rosecrans Ave.,
`Suite 120
`Manhattan Beach, CA 90266
`(310) 980-7440
`svegh@veghlaw.com
`
`Rudolph A. telscheR, JR.
`Counsel of Record
`KARA R. FussneR
`husch BlAcKwell llp
`190 Carondelet Plaza, Suite 600
`St. Louis, MO 63105
`(314) 480-1500
`rudy.telscher@huschblackwell.com
`
`stephen R. howe
`husch BlAcKwell llp
`555 East Wells Street, Suite 1900
`Milwaukee, WI 53202
`(414) 273-2100
`steve.howe@huschblackwell.com
`
`297562
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`

`

`i
`
`QUESTION PRESENTED
`
`In Alice Corp. v. CLS Bank International, 573
`U.S. 208 (2014), this Court laid out the standards for
`analyzing patent eligibility under 35 U.S.C. § 101, and
`explained the main concern undergirding the analysis
`was one of preemption. This Court did not lay out the
`exact boundaries of the test, but rather had previously
`instructed the Federal Circuit may expand on the test
`so long as it was consistent with the statute. The Federal
`Circuit however routinely skips the preemption analysis,
`and has imported a quasi-section 103 analysis into Step
`Two of the test for determining whether the claims recite
`only “conventional” features or amount to “something
`more” than a claim on the abstract idea itself.
`
`The questions presented here are:
`
`1) Whether preemption is a threshold and defining
`consideration that the lower courts must consider
`in determining whether a claimed invention is
`directed to patent eligible subject matter under
`Section 101, and
`
`2) Whether the courts below have erred in
`conflating the Step Two conventionality analysis
`of Alice with the factual prior art patentability
`analysis of Section 103, without the evidentiary
`opportunities and protections against hindsight
`bias afforded by Section 103 and in conflict with
`this Court’s precedent in Graham v. John Deere
`Co. of Kansas City, 383 U.S. 1 (1966).
`
`

`

`ii
`
`PARTIES TO THE PROCEEDINGS BELOW
`AND RULE 29.6 STATEMENT
`
`The parties to the proceedings include those listed
`on the cover. Petitioner states that the party, Consumer
`2.0, Inc. d/b/a Rently (“Rently”) does not have any parent
`corporations and no publicly held companies own 10% of
`more of the stock of the party.
`
`

`

`iii
`
`RELATED CASES
`
`Consumer 2.0, Inc. v. Tenant Turner, Inc., No.
`2:18-cv-00355-RGD-DEM, U. S. District Court for the
`Eastern District of Virginia. Judgment entered November
`1, 2018.
`
`Consumer 2.0, Inc. v. Tenant Turner, Inc., No. 19-
`01846, U.S. Court of Appeals for the Federal Circuit.
`Judgment entered March 9, 2020.
`
`

`

`iv
`
`QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i
`
`PARTIES TO THE PROCEEDINGS BELOW
` AND RULE 29.6 STATEMENT . . . . . . . . . . . . . . . ii
`
`RELATED CASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
`
`TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . iv
`
`TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . vi
`
`TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . vii
`
`OPINIONS BELOW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`STATUTORY PROVISIONS INVOLVED . . . . . . . . . . .1
`
`INTRODUCTION AND STATEMENT OF THE
` CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`I. The Invention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`II. Procedural Background . . . . . . . . . . . . . . . . . . . . .9
`
`REASONS FOR GRANTING THE PETITION. . . . .11
`
`I. The Lower Courts’ Refusal to Address the
`Issue of Preemption is Contrary to This
`Court’s Decision in Alice, and Undermines
`the Purpose of Section 101 . . . . . . . . . . . . . . . . . .11
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`

`

`v
`
`A. The issue of preemption is central to the
`
`Section 101 analysis. . . . . . . . . . . . . . . . . . . .12
`
`B. The Federal Circuit has declared it may
`
`ignore the issue of preemption. . . . . . . . . . .14
`
`C. The asserted claims of the ’590 patent are
`
`not broadly preemptive. . . . . . . . . . . . . . . . .18
`
`II. The Application of Section 101 Cannot be
`Permitted to Subsume the Patentability
`Analysis of Section 103 Without the
` Mandated Safeguards. . . . . . . . . . . . . . . . . . . . . .21
`
`A. This Court did not address the issue in
`Alice or Bilski . . . . . . . . . . . . . . . . . . . . . . . .23
`
`
`B. The Federal Circuit’s conflation of
`
`Sections 101 and 103 is improper . . . . . . . .25
`
`C. The Courts failed to properly analyze
`
`the eligibility of Rently’s patent . . . . . . . . .30
`
`III. T h e E x p a n s i o n o f S e c t i o n 1 0 1
`D i s p r o p o r t i o n a t e l y Hu r t s S m a l l
`Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
`
`
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
`
`Table of Contents
`
`Page
`
`

`

`vi
`
`A P P E N D I X A — J U D G M E N T O F
`T H E U NI T ED STAT ES COU RT OF
`A P P E A L S F O R T H E F E D E R A L
` CIRCUIT, FILED MARCH 9, 2020 . . . . . . . . . . . . .1a
`
`APPENDIX B — OPINION AND ORDER
`OF THE UNITED STATES DISTRICT
`C O U R T F O R T H E E A S T E R N
`DISTRICT OF VIRGINIA, NORFOLK
` DIVISION, FILED APRIL 4, 2019. . . . . . . . . . . . . .3a
`
`APPENDIX C — OPINION AND ORDER
`OF THE UNITED STATES DISTRICT
`COURT FOR THE EASTERN DISTRICT
`OF VIRGINIA, NORFOLK DIVISION,
` DATED NOVEMBER 1, 2018 . . . . . . . . . . . . . . . . .30a
`
`APPENDIX D — DENIAL OF REHEARING
`OF THE U NITED STATES COURT OF
`APPEALS FOR THE FEDERAL CIRCUIT,
` FILED MAY 8, 2020 . . . . . . . . . . . . . . . . . . . . . . . . .57a
`
`TABLE OF APPENDICES
`
`Page
`
`

`

`vii
`
`CASES
`
`United States Supreme Court Cases
`
`Alice Corp. v. CLS Bank International,
`573 U.S. 208 (2014) . . . . . . . . . . . . . . . . . . . . . . . passim
`
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) . . . . . . . . . . . . . . . . . . . . . . . passim
`
`
`Diamond v. Diehr,
`
`450 U.S. 175 (1981) . . . . . . . . . . . . . . . . . . . . . . . . .13, 24
`
`Graham v. John Deere Co. of Kansas City,
`383 U.S. 1 (1966). . . . . . . . . . . . . . . . . . . . . . . . . passim
`
`
`Gottschalk v. Benson,
`
`409 U.S. 63 (1972). . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
`
`KSR International Co. v. Teleflex Inc.,
`
`550 U.S. 398 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . .28
`
`Le Roy v. Tatham,
`
`55 U.S. 156 (1852) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
`
`Mayo Collaborative Services v.
`Prometheus Labs., Inc.,
`566 U.S. 66 (2012). . . . . . . . . . . . . . . . . . . . . . . . . . .4, 14
`
`
`
`Parker v. Flook,
`
`437 U.S. 584 (1978). . . . . . . . . . . . . . . . . . . . . . 3, 23, 24
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`

`

`viii
`
`Federal Circuit Court Cases
`
`American Axle & Manufacturing, Inc. v.
`Neapco Holdings LLC,
`966 F.3d 1347 (Fed. Cir. 2020) . . . . . . . . . . . . . . . . . .17
`
`
`
`Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
`
`788 F.3d 1371 (Fed. Cir. 2015) . . . . . . . . . . . . . . .15, 16
`
`Berkheimer v. HP Inc.,
`
`881 F.3d 1360 (Fed. Cir. 2018) . . . . . . . . . . . . . . .29, 31
`
`Bridge & Post, Inc. v.
`Verizon Communications, Inc.,
`778 F. App’x 882 (Fed. Cir. 2019) . . . . . . . . . . . . . . . .26
`
`
`
`Cellspin Soft, Inc. v. Fitbit, Inc.,
`
`927 F.3d 1306 (Fed. Cir. 2019) . . . . . . . . . . . . . . . . . .31
`
`Cleveland Clinic Foundation v.
`True Health Diagnostics LLC,
`859 F.3d 1352 (Fed. Cir. 2017) . . . . . . . . . . . . . . . . . .15
`
`
`
`Data Engine Technologies LLC v. Google LLC,
`
`906 F.3d 999 (Fed. Cir. 2018) . . . . . . . . . . . . . . . .29, 30
`
`FairWarning IP, LLC v. Iatric Systems, Inc.,
`
`839 F.3d 1089 (Fed. Cir. 2016). . . . . . . . . . . . . . . . . . .16
`
`Intellectual Ventures I LLC v.
`Erie Indemnity Company,
`711 F. App’x 1012 (Fed. Cir. 2017) . . . . . . . . . . . . . . .15
`
`
`
`Cited Authorities
`
`Page
`
`

`

`ix
`
`Intellectual Ventures I LLC v.
`Symantec Corporation,
`838 F.3d 1307 (Fed. Cir. 2016) . . . . . . . . . . . . . . . . . .16
`
`
`
`Internet Patents Corp. v. Active Network, Inc.,
`
`790 F.3d 1343 (Fed. Cir. 2015) . . . . . . . . . . . . . . . . . .25
`
`Smart Systems Innovations, LLC v.
`Chicago Transit Authority,
`873 F.3d 1364 (Fed. Cir. 2017) . . . . . . . . . . . . . . . 14-15
`
`
`
`Synopsys, Inc. v. Mentor Graphics Corporation,
`
`839 F.3d 1138 (Fed. Cir. 2016). . . . . . . . . . . . . . . . . . .15
`
`Two-Way Media Ltd. v.
`Comcast Cable Communications, LLC,
`874 F.3d 1329 (Fed. Cir. 2017). . . . . . . . . . . . . . . . . . .15
`
`
`
`Federal Statutory Authorities
`
`28 U.S.C. § 1254(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`35 U.S.C. § 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
`
`35 U.S.C. § 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . .12, 27, 32
`
`35 U.S.C. § 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
`
`35 U.S.C. § 112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
`
`Fed Cir. R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
`
`Cited Authorities
`
`Page
`
`

`

`x
`
`Other Authorities
`
`2019 Revised Patent Subject Matter Eligibility
`Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019), https://
`www.govinfo.gov/content/pkg/FR-2019-01-07/
` pdf/FR-2019-01-07.pdf . . . . . . . . . . . . . . . . . . . . . . . .18
`
`Alberto Galasso and Mark Schankerman,
`Patent rights and innovation by small and
`large firms, VOX CEPR Policy Portal (Jan.
`7, 2016), https://voxeu.org/article/patent-
`rights-and-innovation-small-and-large-firms. . . . . .34
`
`
`
`Eileen McDermott, Judge Paul Michel to
`Patent Masters Attendees: It’s Time to
`Wake Up to Preserve Our Patent System,
`IPWatchDog (Mar. 16, 2 02 0), https://
`w w w.ipwatchdog.com/2020/03/16/judge-
`paul-michel-time-wake-preserve-patent-
`system/id=119874/ . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
`
`
`
`Error 404: Alice And Section 101 Of The Patent
`Act, Internet Association (May 1, 2017), https://
`internetassociation.org/blog/160204034428-
`error- 404-alice-and-section-101-of-the-
` patent-act/# . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
`
`http://oralarguments.cafc.uscourts.gov/default.
`
`aspx?fl=2019-1846.MP3. . . . . . . . . . . . . . . . . . . . .20, 30
`
`https://www.cnbc.com/video/2020/03/30/virtual-
` home-tours-spike.html . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`Cited Authorities
`
`Page
`
`

`

`xi
`
`Judge Paul Michel and John Battaglia, New
`Enablement-Like Requirements for 101
`Eligibility, IPWatchDog (Aug. 19, 2020),
`https://www.ipwatchdog.com/2020/08/19/new-
`enablement-like-requirements-101-eligibility-
`aam-v-neapco -takes- case -law- context-
`far-part/id=124433/ . . . . . . . . . . . . . . . . . . . . . . . . . . .27
`
`
`
`July 14, 2016 Subject Matter Eligibility Update
`USPTO, https://www.uspto.gov/sites/default/
` files/memo_rlm-sequenom.pdf . . . . . . . . . . . . . . . . . .19
`
`June 25, 2014 Preliminar y Examination
`Instructions USPTO, https://www.uspto.
`gov/sites/default/files/patents/announce/
`alice_pec_25jun2014.pdf . . . . . . . . . . . . . . . . . . . . . . .19
`
`
`
`Lewis, Paxton M. (2017) “The Conflation of Patent
`Eligibility and Obviousness: Alice’s Substitution
`of Section 103,” Utah OnLaw: The Utah Law
`Review Online Supplement: Vol. 2017: No. 1 ,
`Article 1, https://dc.law.utah.edu/cgi/viewcontent.
`cgi?article=1000&context=onlaw . . . . . . . . . . . . . . .26
`
`
`
`Mark A. Lemley and Samantha Zyontz, Does Alice
`Target Patent Trolls?, SSRN (Mar. 26, 2020),
` https://ssrn.com/abstract=3561252 . . . . . . . . . . 32, 33
`
`May 19, 2016 Subject Matter Eligibility Update
`USP T O, https: // w w w.uspt o.gov/sit es /
`default/files/documents/ieg-may-2016_enfish
`_memo.pdf. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`
`
`Cited Authorities
`
`Page
`
`

`

`xii
`
`October 2019 Update: Subject Matter Eligibility
`USP T O, https: // w w w.uspt o.gov/sit es /
`default /files/documents/peg _oct_ 2019_
`update.pdf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
`
`
`
`Paul R. Michel, Patent Eligibility from Mayo to
`American Axle and Beyond, FedCircuitBlog (Aug.
`3, 2020), https://fedcircuitblog.com/2020/08/03/
`guest-post-patent-eligibility-from-mayo-
`to-american-axle-and-beyond/ . . . . . . . . . . . . . . . . . .27
`
`
`
`Robert Sachs, #Alicestorm: Patent Invalidations
`and USPTO Practice After Alice, Bilski Blog
`(Jan, 13, 2015), https://www.bilskiblog.com/
`2015/01/alicestorm/ . . . . . . . . . . . . . . . . . . . . . . . . 16, 17
`
`
`
`Rules and Regulations, 79 Fed. Reg. 241 (Dec. 16,
`2014), https://www.govinfo.gov/content/pkg/
` FR-2014-12-16/pdf/2014-29414.pdf. . . . . . . . . . . . . . .19
`
`The State Of Patent Eligibility In America:
`Part II, (2019) (testimony of Dr. William
`Jenks; The Internet Association), https://
`www.judiciary.senate.gov/imo/media/doc/
`Jenks%20Testimony.pdf . . . . . . . . . . . . . . . . . . . . . . .34
`
`
`
`The State Of Patent Eligibility In America: Part III,
`(2019) (testimony of Kimberly Chotkowski), https://
`www.judiciary.senate.gov/imo/media/doc/
` Chotkowski%20Testimony.pdf . . . . . . . . . . . . . . . . . .27
`
`Cited Authorities
`
`Page
`
`

`

`xiii
`
`The State Of Patent Eligibility In America:
`Par t III, (2019) (testimony of Manny
`Schecter; International Business Machines
`Cor p or at ion), ht t p s: // w w w.jud ic i a r y.
`senate.gov/imo/media /doc/Schecter%20
` Testimony.pdf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
`
`The State Of Patent Eligibility, (2019) (testimony
`of Michael M. Rosen), https://www.judiciary.
`s e n at e . g o v/ i mo / me d i a /do c / R o s e n%2 0
` Testimony1.pdf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
`
`Cited Authorities
`
`Page
`
`

`

`1
`
`OPINIONS BELOW
`
`The Rule 36 disposition of the Federal Circuit is
`reported at 796 F. App’x 752 and reproduced at Pet.
`App. 1a-2a. The Federal Circuit’s decision denying
`Petitioner’s petition for panel rehearing and rehearing
`en banc is reproduced at Pet. App. 57a-58a. The District
`Court’s decision granting respondent’s motion to dismiss
`is reported at 343 F. Supp. 3d 581 and reproduced at
`Pet. App. 30a-56a. The District Court’s decision denying
`petitioner’s motion for leave to file an amended complaint
`is reported at 2019 WL 8895213 and reproduced at Pet.
`App. 3a-29a.
`
`JURISDICTION
`
`The Federal Circuit entered judgment on March 9,
`2020. It denied petitioner’s timely petition for rehearing
`on May 8, 2020. On March 19, 2020, this Court extended
`the time for filing a petition for writ of certiorari to
`October 5, 2020. This Court has jurisdiction under 28
`U.S.C. § 1254(1).
`
`STATUTORY PROVISIONS INVOLVED
`
`35 U.S.C. § 101. Inventions Patentable
`
`Whoever 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.
`
`

`

`2
`
`INTRODUCTION AND
`STATEMENT OF THE CASE
`
`This Court’s decision in Alice provided a welcome
`clarification to the law of Section 101 and has undoubtedly
`been effective in stemming the flood of patents directed
`to nothing more than age-old ideas applied on a computer.
`Unfortunately, it’s misapplication by the lower courts has
`also resulted in the invalidation of non-preemptive patents
`directed to real innovation, and has disproportionately
`hurt individual inventors and start-ups, particularly in
`the realm of software and IT. Without the protection of
`patents, these companies have difficulty competing against
`larger IT and software companies that are infamous for
`their monopoly-like market power.
`
`In this case, the Federal Circuit invalidated, as
`ineligible, a patent that revolutionized the real estate
`showing industry. The idea was so revolutionary that
`industry criticized it as an unworkable approach to
`showing real estate. As the patent owner proved the
`industry wrong, criticism gave way to resounding praise
`and commercial success, and ultimately, copying. Unlike
`the hundreds of older patents that were properly cleaned
`up in the years following Alice, this patent was examined
`by the USPTO after guidance on and adapting to the
`Section 101 analysis in light of Alice. Having specifically
`considered the Section 101 issues, the USPTO allowed
`the claims, which unquestionably do not preempt any
`broad ideas or industries. The claims are directed to one
`particular method of providing safe and secure access to
`a building for showing real estate, utilizing a technology-
`enabled lockbox capable of coordinating with a database
`and responding to unique, time-limited codes only at
`
`

`

`3
`
`the predetermined location and time. This legitimate
`invention was invalidated at the pleading stage despite
`concrete factual allegations regarding its unconventional
`nature, and without any assessment of the potential,
`or lack thereof, for the claims to broadly preempt any
`idea or industry. The courts involved here completely
`ignored the question of preemption, and instead applied
`a test that conflated the requirements of Sections 101
`and 103 – apparently determining at the pleading stage
`that the invention, although alleged to be unconventional,
`combined known elements and thus was not worthy of
`patent protection, mostly in a finger to the wind sort of
`approach. Yet this is not, and should not, be the analysis
`under Section 101.
`
`Unlike other petitioners who have come before it,
`Petitioner here does not seek a complete overhaul or
`revocation of this Court’s decision in Alice. Rather,
`Petitioner believes this Court was on the right track with
`Alice, but that more guidance is required in order to reign
`in the lower courts’ misapplication of the rule so legitimate
`inventions are not mistakenly invalidated. This Court made
`clear in Alice that preemption is the “concern that drives
`[the] exclusionary principal,” and that patents that “pose
`no comparable risk of pre-emption . . . remain eligible” for
`patenting. Alice, 573 U.S. at 217. And elsewhere this Court
`has observed that the issue of patent eligibility is separate
`from the “familiar issues of novelty and obviousness.”
`Parker v. Flook, 437 U.S. 584, 588 (1978). Section 101 should
`thus be a mere speedbump on the road to the more complex
`analysis of patentability, aimed at weeding out patents that
`broadly preempt by claiming only the abstract concept.
`As aptly stated by this Court, “we tread carefully in
`construing this exclusionary principle lest it swallow all of
`
`

`

`4
`
`patent law” because at some level all inventions “embody,
`use, reflect, rest upon, or apply laws of nature, natural
`phenomena, or abstract ideas.” Alice, 573 U.S. at 217.
`Too broad an interpretation of this rule would ultimately
`“eviscerate patent law” and undermine the balance
`sought to be struck by the principles underlying § 101.
`See Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`566 U.S. 66, 71 (2012).
`
`Since Alice and Bilski involved patents directed to age-
`old ideas applied on a general computer, there was no cause
`for this Court to parse the bounds of patent-eligibility, or
`define the entirety of the analysis. There was similarly
`no need to provide guidance as to what constitutes an
`inventive concept, or what considerations may be taken
`into account when determining whether a claimed element
`is “conventional” in Step Two of Alice when this issue is
`debatable. Because there was no cause to address those
`particular issues, this Court instructed that the Federal
`Circuit may expand upon the Section 101 analysis and fill
`in the bounds it did not reach, but with the caveat that any
`expansion must be consistent with the text of the Patent
`Act, and of course, this Court’s decisions on the issue.
`See Bilski v. Kappos, 561 U.S. 593 (2010). Yet there
`can be no doubt that the Federal Circuit’s application
`of the rule departs drastically from the intent of this
`Court. The Federal Circuit has, both implicitly and
`explicitly, conducted the Section 101 analysis in a way
`that conflicts not only with the underlying import in
`this Court’s decisions, but also the mandated distinction
`between Sections 101 and 103, the latter being where true
`patentable assessment in view of prior art is supposed to
`occur. In this case and many others like it, the Federal
`Circuit has completely abandoned the preemption
`
`

`

`5
`
`analysis, finding it inherent in the two-step analysis, and,
`therefore, acceptable to disregard. But, it is this complete
`disregard for the core focus of the Alice test that has led to
`the “exception swallowing the rule.” The Federal Circuit
`has further declared that Step Two is a question of both
`fact and law, but has done so in a way that conflates the
`requirements of Sections 101 and 103, and has resulted in
`courts making an overall assessment of the patentability
`of an invention under the guise of Section 101, but without
`grappling with any of the more complicated aspects of
`Section 103 aimed at avoiding hindsight bias, including
`consideration of secondary consideration evidence (the
`fourth element of Graham v. John Deere), which were
`strongly of record below.
`
`Commentary abounds regarding these failures, as well
`as the disproportionately negative effect the application
`of Alice has had on small businesses. Where, as here, the
`patent system fails, it fails these small inventors the most.
`Unlike larger corporations that can rely on market power
`or a massive portfolio of patents to protect their market-
`share in the event of an improper invalidation, smaller
`software and IT companies are dependent on a properly
`functioning patent system, and an improper invalidation
`can be devastating to their business. (See infra at 18-19.)
`It is therefore imperative that this Court grant certiorari
`and finish the task it began in Alice by clarifying the
`bounds and requirements of the Section 101 analysis to
`make clear that where there is no risk of preemption, the
`exclusionary principals should not apply. Clarification is
`further needed on the issue of Step Two, and in particular
`whether Step Two of the Alice analysis is a question of
`law or fact, and if a question of fact, what considerations
`are permitted. Petitioner asserts that with the proper
`
`

`

`6
`
`clarification of the scope of the Section 101 analysis, the
`oft-heard calls for congressional overhaul of the statute
`would become moot, and that Section 101 jurisprudence
`would finally be in a place to accomplish its purpose of
`striking a balance between rewarding legitimate invention
`while avoiding patents that broadly preempt general ideas.
`Here, the USPTO carefully considered the Section 101/
`Alice issues, allowed the patent claims, and its decision
`making should not be cast aside with no meaningful
`analysis at the pleading stage.
`
`I. The Invention
`
`Rently, a small property management technology
`company located in California, revolutionized the
`property-showing process by conceiving of and designing
`a secure method for showing properties through secure
`self-entry by prospective buyers or renters. In April
`2014 Rently sought patent protection for its invention—a
`system that coordinated a server, several discrete pieces
`of software, and a technology-enabled lockbox to provide
`secure self-entry to properties by utilizing unique,
`time-limited lockbox codes that could be provided to
`a visitor and which would be capable of operating the
`technology-enabled lockbox to provide entry only during
`the predetermined timeframe. Appx41-63. The claims
`of Rently’s U.S. Patent No. 9,875,590 (the “’590 patent”)
`did not issue on any broad concept of real estate showing
`or entry, or even a moderate portion thereof. Nor were
`they directed to mere use of a computer to automate
`showing real estate. Rather, the claims of the ’590 patent
`are directed to one particular, unconventional method of
`accomplishing secure automated entry. Specifically, claim
`7 of the ’590 patent recites:
`
`

`

`7
`
`A method for providing automated entry to
`properties, comprising:
`
`placing a lock box or an automated door lock at
`or near a property;
`
`making the property available as an open house
`to invited visitors;
`
`providing an application interface of an
`application running on a computing system to
`a property manager, the property manager
`being a manager or an owner of the property,
`the application interface prompting the
`property manager to enter a visitor name
`and contact information for a visitor, wherein
`upon receipt of the visitor name and contact
`information, the application provides the
`visitor with an invitation to receive automated
`entry information including code information
`that is valid during a specified period of time
`so that the visitor can enter the property by
`themselves, the invitation being delivered
`to the visitor electronically, the invitation
`being applicable only to the property and the
`invitation requesting identification from the
`visitor;
`
`upon the application receiving and confirming
`identification information from the visitor,
`providing, by the application, automated entry
`information to the visitor that allows the visitor
`to enter the property, the automated entry
`information including code information that is
`valid during the specified period of time;
`
`

`

`8
`
`upon the visitor providing the code information
`to the lock box or automated door lock within
`the specified period of time, the lock box or
`automated door lock opening to facilitate
`automated entry to the property; and,
`
`providing notification, originating from the lock
`box or automated door lock, to the property
`manager when the visitor enters the property.
`
`Appx62 at 10:25-58.
`
`The claims as originally drafted slightly prior to
`this Court’s decision in Alice were broader in scope than
`those that ultimately issued. After this Court’s decision
`in Alice however, and in light of the significant guidance
`provided by the USPTO to its examiners on the issue of
`patent eligibility, the office issued its first rejection on
`October 11, 2016. There, the pending claims were rejected
`as directed to non-statutory subject matter under § 101,
`specifically citing Alice as support. Appx154-157. In 2016,
`and in order to overcome this rejection, Rently added
`specific limitations that, among other things, required
`the presence of a “lock box” that could provide access for
`a specific visitor to a specific property through a unique
`durational code valid only for a specified time period.
`Appx173-174; Appx176. Unlike conventional lockboxes
`that utilize a single code at all times unless manually
`modified, the method now claimed required application to
`provide the visitor with an invitation that includes “code
`information that is valid during a specified period of
`time.” Id. With the amendments requiring time-specific
`coded lock boxes, the examiner agreed that “Applicant’s
`response by virtue of amendments to claims has overcome
`
`

`

`9
`
`the Examiner’s rejection under 35 U.S.C. § 101.” Appx186.
`The patent issued on January 23, 2018 with claim 7 in the
`form set forth above.
`
`This patent did not then sit on a shelf only to be pulled
`out and broadly asserted. Rather, Rently built a business
`around its patented method. As of the time of the Amended
`Complaint, and as alleged, Rently had approximately
`35,000 “smart” lockboxes in circulation for self-showings
`across the United States. Appx406, ¶ 17. These lockboxes,
`coordinated with servers and used for automated entry
`as described in the ’590 patent, can be configured to issue
`from 9 to 100 unique durational codes per day and Rently
`can register up to 160,000 or more renters in its automated
`entry system each month. Appx406, ¶ 17.
`
`Though initially met with skepticism, Rently’s
`innovation ultimately received notice and praise for
`“chang[ing] the game when it comes to showing rentals.”
`Appx415, ¶ 43; Appx466-470. And this praise and success
`has become even more pronounced lately, with Rently’s
`invention recently being featured on CNBC because of
`the surge in business for the embodiment of its patented
`method during the global COVID-19 pandemic. See https://
`www.cnbc.com/video/2020/03/30/virtual-home-tours-
`spike.html.
`
`II. Procedural Background
`
`After Tenant Turner, Inc. (“Tenant Turner”) copied
`the commercialized embodiment of Rently’s invention,
`Rently filed suit on July 3, 2018 for infringement of claims
`7-16 the ’590 patent. Appx90-105. In response, Tenant
`Turner moved to dismiss the asserted claims under 35
`
`

`

`10
`
`U.S.C. § 101. Appx121-152. On November 1, 2018, over
`Rently’s opposition, the district court granted Tenant
`Turner’s motion and dismissed the complaint. Pet. App.
`30a-56a. Rently promptly filed a motion for leave to file an
`Amended Complaint and to alter or amend the judgment.
`In that Amended Complaint, Rently set forth numerous
`factual allegations regarding the unconventional nature
`of the claimed invention as a whole, the unconventional
`nature of the “technology enabled” lockbox of the claims
`(i.e., a lockbox capable of recognizing the recited time-
`limited codes), and the commercial success and industry
`response to the offered system. Appx398-508; Appx509-
`516.
`
`The district court analyzed the asserted claims
`under the two-step framework established in Alice, as
`interpreted by the Federal Circuit. At the first step, the
`district court found the claims directed to the abstract
`idea of “provid[ing] automated entry.” Pet. App. 48a;
`Pet. App. 15a-17a. At Step Two, the district court found
`that the claims merely required the use of “generic
`computer components,” despite the factual allegations to
`the contrary in Rently’s Amended Complaint. Pet. App.
`51a; Pet. App. 27a-28a. Rently alleged, and the claims
`unquestionably require, a lockbox capable of recognizing
`time limited codes. Despite this and despite Rently’s
`allegation that such “technology enabled” lockboxes
`were unconventional, the district court found the words
`“technology enabled” were not in the claims. The district
`court seemingly failed to understand that a “conventional”
`lockbox is not what the claims require, and summarily
`found “lockboxes” conventional. The court did not address
`the issue of preemption (or lack thereof).
`
`

`

`11
`
`Rently timely appealed the district court’s decision.
`In its briefing to the Federal Circuit, Rently argued,
`among other things, that the claims were not preemptive,
`were not abstract, and provided the “something more”
`required under Alice. Fed. Cir. ECF Nos. 15, 20. Rently
`further argued that the court was obligated to accept
`its reasonable construction of the claims at the pleading
`stage, as well as its factual allegations that the claimed
`method and the use of such a lockbox was not routine,
`conventional, or well-known. Fed. Cir. ECF No. 15 at
`33-37; Fed. Cir. ECF No. 20 at 8-11, 14-19. As Rently
`explained, those issues could not be decided adverse to
`Rently at the pleading stage under applicable precedent,
`which is all that was required to survive Tenant Turner’s
`motion to dismiss. Id. Nonetheless, the Federal Circuit
`affirmed without comment under Rule 36.
`
`REASONS FOR GRANTING THE PETITION
`
`I. The Lower Courts’ Refusal to Address the Issue of
`Preemption is Contrary to This Court’s Decision in
`Alice, and Undermines the Purpose of Section 101.
`
`Certiorari is necessary for this Court to clarify the
`role preemption plays in a Section 101 analysis, and to
`ensure lower courts are consistently and properly applying
`the test as set forth. In this case, and many others like it,
`the Federal Circuit has moved too far from the underlying
`theme of Alice, and has instead begun applying its own
`brand of Section 101 jurisprudence in a way that completely
`ignores the issue of preemption, ultimately invalidating
`not only preemptive patents like those in Alice and Bilski,
`but also legitimate, non-preemptive inventions, and at the
`pleading stage in conflict with the USPTO’s consideration
`
`

`

`12
`
`of the same issues and against the backdrop of substantial
`secondary consideration evidence powerfully showing this
`invention was revolutionary and patentable. Where there
`is no risk of broad preemption of an underlying idea, courts
`must follow this Court’s guidance and find the claims
`eligible for patent protection. See Alice, 573 U.S. at 217.
`The analysis can then proceed under Sections 1

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