Introduction
In Mobile Acuity Ltd. v. Blippar Ltd., No. 2022-2216 (Fed. Cir. Aug. 6, 2024) ("Decision"), the United States Court of Appeals for the Federal Circuit affirmed the district court's dismissal of Mobile Acuity Ltd.'s ("Mobile Acuity") patent infringement claims under 35 U.S.C. § 101 for failure to state a claim. The Federal Circuit held that the patents at issue, U.S. Patent Nos. 10,445,618 ("the '618 patent") and 10,776,658 ("the '658 patent"), were directed to ineligible subject matter—abstract ideas implemented on a general-purpose computer. See Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014). The Federal Circuit held that the case was properly dismissed at the pleadings stage, because the lack of patentable subject matter "clearly appears on the face of the pleading." Decision at 13 (citation omitted).
The Parties & Their Dispute
Mobile Acuity owns the '618 and '658 patents, both of which relate to methods for storing and retrieving information using captured images. These patents describe a system where a user captures an image of a location or object, which is then used to retrieve associated information stored in a database by referencing the captured image data. The patent's Abstract describes these functions as alternatives to using barcodes or RFID tags. In real-life terms, this technology allows users to take a photo of a landmark, product, or other identifiable object, and instantly receive relevant information about the object on their devices, such as historical data, product specifications, or related services. For example, a tourist could photograph a monument and access details about its history, or a consumer could take a picture of a product in a store to learn more about its features or read reviews.
Mobile Acuity filed its patent infringement lawsuit in the United States District Court for the Central District of California against Blippar Ltd., and its related entities (collectively, "Blippar"), a company known for its augmented reality and visual search technologies. Mobile Acuity alleged that Blippar's products infringed one or more claims of the '618 and '658 patents. In response, Blippar moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(6), arguing that Claim 9 of the '618 patent was representative of all asserted claims and that the claims were directed to ineligible subject matter under Section 101. Before the district court could rule on the motion, Mobile Acuity amended its complaint twice in an attempt to address Blippar's arguments and to demonstrate the inventiveness of its patented technology under the Supreme Court's two-step analysis in Alice, 573 U.S. 208.
In its second amended complaint, Mobile Acuity attempted to show how its patented technology provided a specific improvement over the prior art and to show that Claim 9 of the '618 patent was not representative of the other asserted claims. And in its opposition to Blippar's motion to dismiss, Mobile Acuity provisionally requested leave to further amend its complaint if the district court found any deficiencies in its asserted claims.
Despite these arguments and amended pleadings, the district court granted Blippar's motion to dismiss with prejudice, concluding that the patents were directed to ineligible subject matter. The court also further denied Mobile Acuity's request for leave to amend, finding that any amendment would be futile.
The Federal Circuit's Analysis
The Federal Circuit's analysis focused on applying the two-step framework established by the Supreme Court in Alice to determine whether the asserted patent claims were directed to patent-eligible subject matter.
Step One: Abstract Idea
At the first step of the Alice test, the Federal Circuit considered whether the claims were directed to a patent-ineligible concept, such as an abstract idea. The court concluded that the claims of the '618 and '658 patents were indeed directed to an abstract idea, specifically the concept of associating information with an image and retrieving that information using the image's data. Decision at 9-10.
The district court had framed the abstract idea as "leaving information at a location or object for one's future use or reference," emphasizing the notion of storing information for future access. Decision at 9. While agreeing that the claims were directed to an abstract idea, the Federal Circuit articulated this abstract concept "slightly (and not materially) differently," describing it as "associating" "user-defined information" "with an image in a database" and "providing access to that information" by image comparison. Decision at 18-19.
The Federal Circuit noted that the claims did not specify any particular method for performing the image comparison or information retrieval but instead used functional language to describe the desired result rather than the specific means of achieving it. Decision at 19. The Federal Circuit emphasized that "claims reciting generalized steps of collecting, analyzing, and presenting information, using nothing other than the conventional operations of generic computer components, are directed to abstract ideas." Id. (citing AI Visualize, Inc. v. Nuance Commc'ns, Inc., 97 F.4th 1371, 1378 (Fed. Cir. 2024) ("We have explained that the steps of obtaining, manipulating, and displaying data, particularly when claimed at a high level of generality, are abstract concepts."); Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353-54 (Fed. Cir. 2016) (finding challenged claim directed to abstract idea of "collecting information, analyzing it, and displaying certain re- sults of the collection and analysis"); Berkheimer v. HP Inc., 881 F.3d 1360, 1366-67 (Fed. Cir. 2018) (same for "parsing, comparing, storing, and editing data")).
The Federal Circuit likewise concluded that the other asserted patent claims "add nothing of significance to the eligibility analysis" and rejected Mobile Acuity's assertion that the claims evidence improvements in computer functionality. Decision at 19-20. The Federal Circuit commented that at most, the claims "'improv[e] a user's experience while using a computer application,' which 'is not, without more, sufficient to render the claims directed to an improvement in computer functionality.'" Decision at 21 (quoting Customedia Techs., LLC v. Dish Net- work Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020)).
Step Two: Lack of an Inventive Concept
Turning to the second step of the Alice framework, the Federal Circuit assessed whether the claims contained an "inventive concept" that could transform the abstract idea into a patent-eligible application. Mobile Acuity asserted that the "inventive concept" in its patent claims was "using the object (or location) itself as the trigger for leaving information to be collected in the future." Decision at 22.
The Federal Circuit rejected that assertion noting that Mobile Acuity's alleged "inventive concept" is merely "part of the abstract idea of comparing images and displaying information based on the comparison." Id. This violates the court's fundamental rule that "the abstract idea 'cannot supply the inventive concept that renders the invention 'significantly more' than" the abstract idea. Id. (quoting Simio, LLC v. FlexSim Software Prod., Inc., 983 F.3d 1353, 1364 (Fed. Cir. 2020)).
The Federal Circuit likewise rejected Mobile Acuity's assertion that its alleged "inventive concept" is not found in the prior art. The court explained that, even if true, Mobile Acuity's "contention is unavailing at step two, as 'a claim for a new abstract idea is still an abstract idea.'" Decision at 22 (quoting Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016)). The court reasoned that even if "'[w]e may assume that the techniques claimed are groundbreaking, innovative, or even brilliant, . . . that is not enough for eligibility.'" Decision at 22 (quoting SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018)).
Mobile Acuity further contended that the patent claims' use of "interest points" in the image comparison process constituted an inventive concept. However, the court found that the concept of using interest points for image comparison was well-known in the prior art, as admitted in the patents' specification. Decision at 22-23. Moreover, "[e]ven assuming the specification leaves room for Mobile Acuity to plausibly allege that the use of 'interest points' is nonetheless an inventive concept," the Federal Circuit concluded that Mobile Acuity "failed to do so." Id. at 23.
Representativeness of Claim 9
A significant issue in the case was whether Claim 9 of the '618 and '658 patents was representative of all asserted claims. Blippar argued that Claim 9 was representative because it captured the core inventive concept that was common across the other claims, which Mobile Acuity had also asserted in the case. The district court agreed with Blippar, treating Claim 9 as representative and applying its analysis of Claim 9 to the other asserted claims. Decision at 16-17.
On appeal, Mobile Acuity argued that the district court had erred in treating Claim 9 as representative, asserting that the additional limitations in the other claims added significant elements that should have been individually analyzed. However, the Federal Circuit found that Mobile Acuity had failed to provide a non-frivolous argument for the distinctiveness of the other claims during the district court proceedings. Decision at 17. The Federal Circuit upheld the district court's determination, emphasizing that the claims were "substantially similar and linked to the same" abstract idea, and therefore, it was appropriate to treat Claim 9 as representative. Decision at 14.
Refusal to Allow Amendment of the Complaint
Finally, the Federal Circuit addressed Mobile Acuity's argument that the district court erred by not allowing it to amend its complaint for a third time. Mobile Acuity sought to address the deficiencies identified by the court by filing a third amended complaint, but the district court denied this request, concluding that any amendment would be futile because the patents were fundamentally directed to ineligible subject matter.
The Federal Circuit upheld the district court's decision, agreeing that the proposed amendments would not cure the defects in the claims. Decision at 23-24. The court noted that even with the proposed amendments, the claims would still be directed to the same abstract idea without introducing any inventive concept that could overcome the Section 101 bar. Decision at 24 (newly asserted allegations in proposed third complaint "are nothing more than the implementation of an abstract idea with conventional computer operations").
Conclusion
The Federal Circuit's decision in Mobile Acuity v. Blippar underscores the inherent challenges of enforcing software patents, which inevitably face Section 101 eligibility challenges. The fundamental problem with software patents lies in their frequent focus on automating tasks that could otherwise be performed manually, rendering them susceptible to being characterized as abstract ideas—steps that merely expedite time-consuming processes. As a result, success in overcoming Section 101 challenges is less about navigating the first step of the Alice test and more about satisfying the second step—demonstrating a true inventive concept.
While trial attorneys may do their best when arguing against Section 101 challenges, they can rarely rise above the raw material at their disposal—the patent's claims and the supporting information in the patent's specification. The real battle for patent eligibility, therefore, begins long before litigation, during drafting and prosecution of the patent itself. To withstand Section 101 scrutiny, patents should be drafted with a focus on defining and claiming inventive concepts that are not merely abstract ideas, but rather directed toward concrete improvements in computer functionality.
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