Visual Memory, LLC v. NVIDIA Corporation

Visual Memory, LLC v. NVIDIA Corporation
867 F.3d 1253 (Fed. Cir. 2017)

Authored by John A. Bertino

Statement of Facts: Visual Memory, LLC (“Visual”) developed United States Patent No. 5,953,740 (“the ‘740 patent”) to improve computer memory systems. Specifically, the ’740 patent describes a computer system using a three-tiered memory hierarchy: “1) a low-cost, low speed memory, such as a magnetic disk, for bulk storage of data; 2) a medium-speed memory that serves as the main memory; and 3) an expensive, high-speed memory that acts as a processor cache memory.” Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1255 (Fed. Cir. 2017). Visual alleges that the ‘740 patent can overcome prior art memory systems’ lack of versatility by adding programmable operation characteristics that can be used with multiple different processors without a reduction in performance. Visual further alleges that the ‘740 patent’s “multiple mode operation” confers a substantial advantage by “allow[ing] different types of processors to be installed with the [same] subject memory system without significantly compromising their individual performance.” ’740 Patent col. 5 ll. 25-29. On September 8, 2015, Visual filed a patent infringement action against NVIDIA Corporation (“NVIDIA”) for infringement of the ‘740 patent. NVIDIA moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, arguing that the claims were patent-ineligible subject matter.

Procedural History: The United States District Court for the District of Delaware granted NVIDIA’s motion to dismiss, finding that the ‘740 patent was directed to patent-ineligible subject matter and lacked an inventive concept. Visual appealed to the Federal Circuit.

Question Presented: Did the district court err in finding all claims to be directed to an abstract idea and therefore not patent-eligible?

Holding: Yes, the district court erred in granting the motion to dismiss based on 35 U.S.C. § 101 because all claims are patent-eligible. The Federal Circuit reversed the district court and remanded the case for further proceedings.

Reasoning: The Federal Circuit reviewed the district court’s grant of a motion to dismiss de novo and rejected its finding of section 101 invalidity.

Section 101 defines the scope of patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. However, the Supreme Court has recognized exceptions to this broad definition for laws of nature, natural phenomena, and abstract ideas. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (citation omitted).

The Supreme Court set out a two-step test for distinguishing between claims that are patent eligible and claims drawn to a patent-ineligible concept. Alice Corp. Pty. v. CLS Bank International, 134 S. Ct. 2347, 2355 (2014). Under the first step in the test set forth in Alice Corp. (the “Alice test”), the district court found that ‘740 patent claims were drawn to the patent-ineligible concept of an abstract idea. Id. at 2354 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)). The district court rejected Visual’s reliance on the recent decision in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) that the ‘740 patent claims “improve[d] the functioning of a computer itself” and thus [were] patent eligible,” asserting that the claims were not directed to a specific or concrete improvement in the way the software operates but instead were directed to the idea of categorical data storage. Visual Memory LLC v. NVIDIA Corp., 2016 WL 3041847, at *4-5 (D. Del. May 27, 2016).

Following the Alice test, the Federal Circuit disagreed with the district court’s analysis, finding the ’740 patent claims demonstrated that they were directed to an improved computer memory system and not an abstract idea of categorical data storage.

The Federal Circuit clarified their finding in Enfish, 822 F.3d 1327, that claims reciting a self-referential table for a computer database were patent-eligible under Alice step one because they were directed to an improvement in the computer’s functionality. The Federal Circuit also clarified that in Thales Visionix Inc. v. United States, 850 F.3d 1343, 1347 (Fed. Cir. 2017), claims reciting a unique configuration of inertial sensors and mathematical equations to calculate the location and orientation of an object relative to moving platforms was patent eligible because the sensors and equations were used in a non-conventional manner to increase accuracy.

Like in Enfish and Thales, the claims at issue here were focused on a “specific asserted improvement in computer capabilities – the use of programmable operational characteristics that are configurable based on the type of processor – instead of on a process that qualifies as an abstract idea . . . .” Visual Memory, 867 F.3d at 1259-1260 (internal quotations and citation omitted).

Further, the Federal Circuit reasoned that this was “not a case where the claims merely recite[d] the use of an abstract mathematical formula on any general purpose computer, a purely conventional computer implementation of a mathematical formula, or generalized steps to be performed on a computer using conventional computer activity.” Visual Memory, 867 F.3d at 1260 (internal quotations and citation omitted). Because the Federal Circuit found that the claims were not directed to a patent-ineligible concept, the court need not proceed to step two of the analysis.

The majority criticized the dissent, contending that (1) the dissent’s assumption that the code would not teach one of ordinary skill in the art was improper, (2) whether a patent specification teaches an ordinarily skilled artisan how to implement the claimed invention presents an enablement issue under 35 U.S.C. § 112 and not an eligibility issue under section 101, and (3) the dissent’s assumption that the innovative effort in the ‘740 patent lies in the programming required for a computer to configure a programmable operational characteristic of a cache memory was inconsistent with the patent specification itself. “The specification makes clear that the inventors viewed their innovation as the creation of a memory system which is efficiently operable with different types of host processors . . . and the patent discloses how to implement such a memory system.” Visual Memory¸ 867 F.3d at 1261 (citation omitted). Further, under Mayo and Alice, “an invention is not rendered ineligible for patent simply because it involves an abstract concept.” Id.

In sum, the Federal Circuit found, under 35 U.S.C. § 101, the ‘740 patent was not directed to patent-ineligible subject matter.

Dissenting Opinion: Judge Hughes contends that the ‘740 patent claims encompassed categorical data storage at an unduly high level of abstraction. Judge Hughes found that the programmable operational characteristic was nothing more than a black box for performing the abstract idea because it did not describe its implementation and required someone else to supply the innovative programming effort.

At Alice step two, Judge Hughes found no additional elements to transform the nature of the claim into a patent-eligible application. Judge Hughes asserted that the claims did not contain an inventive concept and only referred to the generic computer components to perform generic computer functions.

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