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Explore the latest in patent, trademark, and copyright cases on the Merchant & Gould LLP blog. Stay informed with expert insights on intellectual property law updates.

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The U.S. Court of Appeals for the Federal Circuit recently issued a precedential decision in Hawk Tech. Sys., LLC v. Castle Retail, LLC (Feb. 17, 2023), holding that the asserted patent failed the Alice test and was therefore invalid under 35 U.S.C. § 101.

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Hawk’s patent relates to a method for viewing multiple video surveillance images on a remote display device. The claimed invention involved a method of operating a video surveillance system using cameras, a broadband connection, a server, and a monitor control system. Hawk sued Castle in the Western District of Tennessee based on the latter’s use of a video surveillance system in its grocery stores, and Castle moved to dismiss under Rule 12(b)(6), arguing the asserted claims were directed to patent ineligible subject matter. The district court granted the motion. Hawk appealed.

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The Federal Circuit affirmed. The Court found that under the first step of the Alice test the claims recited only the functional results of receiving, displaying, converting, storing, and transmitting digital video data, which were abstract ideas. Hawk argued the patent solved an important technical problem by conserving bandwidth while preserving image quality, but nothing in the claims recited how that goal was achieved. The claims recited merely abstract data manipulation steps rather than a concrete solution and thus failed to pass step one of Alice. Likewise, the Court found the patent failed to transform the abstract idea into something more under the second step of Alice because the specification described the purported improvement as using conventional components and already existing technology.

The Federal Circuit also found that the district court erred by not expressly rejecting Castle’s reliance on information outside the pleadings or otherwise treating the motion as one for summary judgment—as required under Sixth Circuit procedural law—but that the error was harmless. The district court’s decision never referenced the outside information and, to the contrary, stated that its analysis was purely based on the legal sufficiency of Hawk’s claim. The Federal Circuit also found the dismissal was justified irrespective of any extraneous materials.

CAFC Affirms Invalidity for Lack of Patent Eligible Subject Matter