source: Caselaw Access Project

author: CHEN, Circuit Judge.

license: Public Domain

text:
    COMCAST IP HOLDINGS I LLC, Plaintiff-Appellee v. SPRINT COMMUNICATIONS COMPANY, L.P., Sprint Spectrum LP, Nextel Operations, Inc., Defendants-Appellants
    2015-1992
    United States Court of Appeals, Federal Circuit.
    Decided: March 7, 2017

      Matthew B. Lehr, Davis Polk & Ward-well LLP, Menlo Park, CA, argued for plaintiff-appellee. Also represented by Anthony I. Fenwick, Gareth Dewalt, David Lisson.
    Brian Charles Riopelle, McGuire Woods LLP, Richmond, VA, argued for defendants-appellants. Also represented by David Evan Finkelson, Brian David Schmalzbach; Rachelle Harley Thompson, Raleigh, NC.
    Before O’MALLEY, REYNA, and CHEN, Circuit Judges.
   CHEN, Circuit Judge.

Comcast IP Holdings I LLC (Comcast) sued Sprint Communications Company LP, Sprint Spectrum L.P., and Nextel Operations, Inc. (collectively, Sprint) for infringement of, among other patents, U.S. Patent Nos. 8,170,008, 7,012,916, and 8,204,046 (collectively, Low Patents), which are generally directed to the use of computer network technology to facilitate a telephone call (phone call or call). After a jury trial, the jury found that Sprint’s handling of certain phone calls infringed claims 1, 13, and 27 of the ’008 Patent, claim 45 of the ’916 Patent, and claims 90 and 113 of the ’046 Patent, and awarded Comcast a $7.5 million damages award. The district court then denied Sprint’s motion for judgment as a matter of law (JMOL), or in the alternative, for a new trial, and added prejudgment interest to the damages award. Sprint has appealed various rulings from the district court. Because we see no error in these rulings, we affirm the district court’s entry of judgment against Sprint.

Background

A. The Claimed Inventions

The Low Patents are in the same patent family and are generally directed to methods of using Domain Name System (DNS) technology, such as the Internet, to initiate and route a phone call through a switched telecommunication system.

One example of a switched telecommunication system is a public switched telephone network (PSTN), which provides for a bearer channel (i.e., “interconnection”) between two telephones “according to a called-party telephone number input at the calling-party telephone.” ’008 Patent col. 2 ll. 13-17; see also id. col. 1 ll. 31-41 (defining a switched telecommunication system as “a system comprising a bearer network with switches for setting up a bearer channel through the network”). A PSTN is shown in Figure 1.

Id. fig. 1. In Figure 1

customer premises equipment, CPE[] 10 (such as standard analogue telephones....) are connected through an access network 11 to switching points, SPs 12. The SPs 12 form nodes in an inter-exchange network 13 made up of interconnecting trunks 14 and SPs that are controlled by control entities 15 in the SPs. The control effected by the control entities 15 is determined by sig-nalling inputs received from the CPEs and other SPs, and involves call setup, maintenance and clearance to provide the desired bearer channel between calling CPE and called CPE. Conceptually, the PSTN may be thought of as a bearer network and a control (signalling) network, the function of the latter being to effect call control through the bearer network, namely the control of setup, maintenance and take down of bearer channels through the bearer network; in practice, the bearer and signalling networks may use the same physical circuits and even the same logical channels.

Id. col. 2 ll.19-35.

The Low Patents also explain that a “communication system” generally has “a broader meaning than switched telecommunication system” and “include[s] data-gram-based communication systems where each data packet is independently routed through a bearer network without following a predetermined bearer channel.” Id. col. 1 ll. 50-55. One example of a data-gram-based communication system is the Internet. See, e.g., Appellant Br. at 40.

Asserted claim 1 is representative of the claimed invention in the ’008 Patent:

1. A method, comprising:

receiving, over a switched telecommunication system, a request;
determining, responsive to the request, a call destination using domain name system signaling; and
initiating a call through the switched telecommunication system between a calling party and the call destination that was determined as a result of said domain name system signaling.

Id. col. 32 ll. 46-55.

Asserted claims 45 and claim 90 below are representative of the claimed inventions for the ’916 Patent and the ’046 Patent.

45. A method of accessing communications data for contacting a target entity, said method comprising:
forming, from a number string identifying the target entity, a domain name by a process including parsing at least a substantial portion of the number string into at least a part of said domain name;
supplying the domain name formed to a DNS-type database system and receiving back a resource record including an URI [uniform resource identifier] for locating communications data associated with the domain name; and using the URI received back to access said communications data.

’916 Patent col. 36 ll. 56-67:

90. A method, comprising:

forming, by at least one computing device, from a number string identifying a target entity, a domain name by a process including parsing at least a portion of the number string into at least a part of said domain name; and supplying, by the at least one computing device, the domain name to a database and receiving back from that database a resource record including a uniform resource identifier (URI) of the target entity.

’046 Patent col. 45 l. 65-col. 46 l. 6.

B. The Accused Methods

The six accused methods are ways in which Sprint connects a calling party with a called party (call flows), and there is no dispute as to how these accused call flows operate.

Comcast accused three call flows of infringing the ’008 Patent. See Appellant Br. at 15. These calls generally begin on Sprint’s wireless cellular network that uses a standard known as Code Division Multiple Access, or “CDMA” (CDMA Network). The calls then travel through an Internet Protocol Multimedia Subsystem network (IMS Network). “The IMS Network includes an IMS core, which is a collection of servers on a packet-based network used to route and process signaling traffic” for the calls. Id. at 16 n.7.

When a call enters the IMS core, it does so through a media gateway controller, or “MGC.” Id. at 18. Once the call enters the IMS core, “a network element named a call session control function (‘CSCF’) uses [DNS] signaling to determine an IP address used to route the call to a session border controller (‘SBC’).” Id. at 18-19. “The SBC is another server on the IMS core.” Id. at 19. From there, the call is routed outside of the IMS core, and then back into the IMS core to another MGC. Id. “The MGC is not specific to any particular telephone number or service provider.” Id. From the MGC, the call is ultimately routed to the called party. Id.

Comcast accused another three call flows of infringing the ’916 Patent and the ’046 Patent. Id. at 15. Common to these call flows are their use of a process referred to as “ENUM” to route calls through the IMS core. “That method starts with a [called] telephone number, removes any special characters, reverses the numbers, places a dot between each number, and adds ‘e.l64.arpa’ to the end” of the number.” Id. at 27.

C. Procedural Background

Comcast asserted claims 1, 13, and 27 of the ’008 Patent, claim 45 of the ’916 Patent, and claims 90 and 113 of the ’046 Patent against Sprint in the District of Delaware. The parties disputed the claim constructions for, among other terms, the term “switched telecommunication system” in the ’008 Patent and the term “parsing” in the ’916 Patent and the ’046 Patent. For the term “switched telecommunication system,” the parties disagreed as to whether such a system could include elements of a datagram-based system. J.A. at 3. The district court concluded that “[a] system with elements of both switches and a ‘datagram-based system’ is not necessarily outside the scope of a ‘switched telecommunication system.’ ” Id. at 4. “A ‘communication system’ is still a broader concept than a ‘switched telecommunication system’ even where the ‘switched telecommunication system’ has elements of a ‘datagram-based system,’ because a ‘switched telecommunication system’ at a minimum must have switches and function on a bearer network.” Id.

As for the term “parsing,” the district court determined that “parsing” was an automated process because it necessarily required a computer. See id. at 39. And the parties agreed that the term must include “analyzing a string according to a set of rules of a grammar.” Id. at 40. But they differed on whether the relevant prosecution histories of the ’916 Patent and the ’046 Patent demonstrated disavowals of claim scope so as to limit the term “parsing.” See id. The district court saw no clear disavowals of claim scope in the prosecution histories. Id.

After a six-day jury trial, the jury found that all of the asserted claims of the Low Patents were infringed by their respective accused call flows and awarded Comcast a lump sum payment of $7.5 million in damages. Id. at 49. Sprint then moved for JMOL, as well as for a new trial, on several bases. See id. at 48-69. For example, Sprint argued that there was insufficient evidence to support the jury’s verdict as to the ’008 Patent because Comcast’s evidence, in the form of expert testimony from Dr. Eric Burger, only demonstrated that “any destination along the way in route of a call” could be a “call destination,” and wrongly suggested that there could be “multiple destinations” along a call flow. Id. at 53-54. Sprint insisted this understanding of “call destination” was flawed because the claim term can only refer to “the absolute final point in the call flow, or the receiving phone,” otherwise the term would be superfluous.. Id. at 52, 54.

The district court disagreed with Sprint. The district court noted that the jury was instructed to apply the common meaning of “call destination” in rendering its verdict as neither party asked for a construction of the claim term. Id. at 53 & n.l. The district court explained that the jury could have reasonably concluded — based on Comcast’s expert — that “there are intermediate ‘call destinations’ ” along the accused call flows. Id. at 54. It further explained that the jury could have “reasonably lookfed] at the claims and conclude[d] that the word ‘a’ before the first use of the term call destination implied that there could be more than one destination. ...” Id.

Sprint likewise contended that there was insufficient evidence to prove that Sprint’s accused call flows infringed the asserted claims of the ’916 Patent and the ’046 Patent because Comcast did not demonstrate that the “parsing” limitation was met. Id. at 57-58. The court disagreed again, citing testimony from Dr. Burger. See id. at 59-60.

Moreover, Sprint took exception to the district court’s decision to tack on prejudgment interest to the $7.5 million damages award. Id. at 65. Sprint maintained that prejudgment interest should only be calculated from the time of first infringement of each patent until judgment, rather than from the time of the relevant hypothetical negotiation — here 2006 — until judgment. Id. More specifically, Sprint insisted that prejudgment interest should not be applied to the damages relevant to the infringement of the ’008 Patent and the ’046 Patent because those patents had not yet been issued in 2006 (the time when the ’916 Patent was issued) — they were only issued in 2012. Id. at 65-66.

The district court rejected Sprint’s argument, observing that “both sides’ experts opined that the reasonable royalty should be a lump sum resulting from a single hypothetical negotiation that took place in 2006” if Sprint were found to infringe all three patents. Id. at 66 (citing trial transcript). Based on that agreement, the district court concluded that “[a] hypothetical negotiation in 2006 would include each of the asserted patents, even if they issued later, and the resulting negotiation would include the fact that two of the patents issued later.” Id. (citing ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 872 (Fed. Cir. 2010)). Moreover, because of the agreed-upon methodology of using a lump sum award for infringement of all of the patents, the district court noted the practical problem of assessing prejudgment interest on a per patent basis whére the lump sum verdict did not apportion the damages for each patent. See id.

Sprint has filed a timely appeal. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2012).

Standards of Review

The law of the regional circuit controls our standard of review for the denial of a motion for JMOL. E.g., MobileMedia Ideas LLC v. Apple Inc., 780 F.3d 1159, 1164 (Fed. Cir. 2015). In the Third Circuit, review of such a denial is without deference. See, e.g., Rinehimer v. Cemcol-ift, Inc., 292 F.3d 375, 383 (3d Cir. 2002). We “review the record in the light most favorable to the prevailing party ‘unless the record is critically deficient of that minimum quantum of evidence from which a' jury might reasonably afford relief.’ ” Potence v. Hazleton Area Sch. Dist., 357 F.3d 366, 370 (3d Cir. 2004) (quoting Rotonda v. Keene Corp., 956 F.2d 436, 438 (3d Cir. 1992)).

The proper construction of a patent’s claims is an issue of Federal Circuit law, and we apply the framework set forth in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., — U.S. ——, 135 S.Ct. 831, 840-42, - L.Ed.2d - (2015). E.g., Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843 F.3d 1315, 1326 (Fed. Cir. 2016). Under that framework, intrinsic evidence and the ultimate construction of claim terms are reviewed de novo, and underlying factual determinations concerning extrinsic evidence are reviewed for clear error. See id. “Where an infringement verdict relies on incorrect construction of the disputed claim terms, this court may grant JMOL or order a new trial to correct the error, depending on the degree of difference between the incorrect construction and the correct construction.” Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1333 (Fed. Cir. 2008). “If no reasonable jury could have found infringement under the proper claim construction, this court may reverse a district court’s denial of JMOL without remand.” Id. (citing Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1255-57 (Fed. Cir. 2005)).

Determination of infringement is a question of fact, which, in the context of a jury trial, we review for substantial evidence. Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167, 1177 (Fed. Cir. 2002) (citing B. Braun Med., Inc. v. Abbott Labs., 124 F.3d 1419, 1423 (Fed. Cir. 1997)).

Discussion-

A. Construction of “Switched Telecommunication System” in the Asserted Claims of the ’008 Patent

Sprint contends that the proper construction of “switched telecommunication system” must be one that excludes any element of a datagram-based system, so as to render it consistent with the “fundamental requirement” of the ’008 Patent, which is that a phone call must “travel[] over a predetermined bearer channel all the way from the caller to the call destination.” Appellant Br. at 32-33. (emphasis added). Sprint’s insistence is not only unpersuasive, but also irrelevant because the infringement verdict would remain unaffected even under its narrower construction.

We may affirm the jury’s findings on infringement if substantial evidence appears in the record supporting the jury’s verdict, and if correction of errors in claim construction would not have changed the verdict, given the evidence presented. See Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1328 (Fed. Cir. 2002) (citing Weinar v. Rollform Inc., 744 F.2d 797, 808 (Fed. Cir. 1984)). Prejudicial error here requires “sufficient evidence ... to support a finding of non-infringement under a correct instruction.” CytoLogix Corp. v. Ventana Med. Sys., Inc., 424 F.3d 1168, 1174 (Fed. Cir. 2005) (alteration omitted) (quoting Ecolab, Inc. v. Paraclipse, Inc., 285 F.3d 1362, 1374 (Fed. Cir. 2002)).

Here, even if “switched telecommunication system” were construed so as to exclude any element of a data-gram-based system, Sprint has not demonstrated how the relevant accused call flows do not infringe the ’008 Patent. In other words, Sprint has not shown prejudice. Sprint does not dispute that its CDMA Network is where a call is initiated or set up and that the CDMA Network is a switched telecommunication system having no data-gram-based elements. See Appellant Br. at 39-40.

Moreover, adoption of Sprint’s construction would not permit it to argue that the ’008 Patent requires a call to travel “exclusively” over a switched telecommunication system. See id. at 16 (“None of the accused call flows travels exclusively over a switched network or predetermined bearer channels. Instead, each starts on Sprint’s CDMA network, travels through Sprint’s ... IMS ... network (a packet-based network), and eventually returns to the CDMA network or the CDMA air interface for routing to the called handset.” (footnotes omitted)). The claim language does not demand this. Claims 1 and 13 only require “initiating a call through the switched telecommunication system,” ’008 Patent col. 32 ll. 46-55; id. col. 33 ll. 31-40 (emphasis added), and claim 27 only requires “setting up a call through the switched telecommunication system,” id. col. 34 ll. 39-47 (emphasis added). These claims do not state that after a call is either initiated or set up through a switched telecommunication system, the call must also travel exclusively on that system to a particular destination.

The specification also does not support the construction that Sprint desires. It reveals that the ’008 Patent is not directed to methods of transmitting an entire call from a calling party’s phone to the called party’s - phone; rather, it is directed to methods, consistent with the claim language, for initiating or setting up a call intended for transmission to a called party. See id. col. 1 ll. 27-30 (“The present invention relates to a method of accessing service resource items that are intended to be used in setting up bearer channels through a switched telecommunications system.” (emphasis added)). And figure 15 in the specification expressly contemplates a call that does not travel exclusively on a switched telecommunication system. See id. fig. 15; see also id. col. 27 ll. 10-14.

To support its theory that the ’008 Patent requires a call to travel exclusively on a switched telecommunication system, Sprint relies on the specification’s explanation that datagram-based elements are “logically distinct” from the switched telecommunication system. See Appellant Br. at 35-36 (citing ’008 Patent col. ll 1. 65-col. 12 l. 2). The specification explains that “[t]he intention of requiring the computer network to be logically distinct from the [switched] telecommunication[ ] system is to exclude computer networks that are dedicated to the management or monitoring of the bearer network and effectively form part of the [switched] teleeommunication[ ] system itself.” ’008 Patent col. 11 ll. 50-55. This explanation, however, does not suggest that a call either initiated or set up on a switched telecommunication system cannot traverse any datagram-based elements once it leaves the system.

Accordingly, we sustain the jury’s verdict of infringement of claims 1, 13, and 27 of the ’008 Patent because there is substantial evidence that the relevant accused call flows were either initiated or set up on a switched telecommunication system.

B. Sufficiency of Evidence for “Call Destination” Limitation in Asserted Claims 1 and 13 and “Identifier of a Second Party” Limitation in Asserted Claim 27 of the ’008 Patent

Sprint next complains that there was insufficient evidence for the jury to find that the “call destination” limitation of claims 1 and 13 of the ’008 Patent — which the jury was instructed to apply its plain and ordinary meaning because neither party asked for a construction — was met by the relevant accused call flows. See Appellant Br. at 41-50. According to Sprint, Comcast only presented evidence that a call destination was any point on a call flow, but a call destination .must be the “final point on the path of a call.” Id. at 43. We disagree with Sprint as there is substantial evidence to support the jury’s finding that the relevant accused call flows met the “call destination” limitation.

Sprint “is essentially [proffering] a claim construction argument regarding the meaning of the term [‘call destination’] ... in the guise of a challenge to the sufficiency of the evidence of infringement.” ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 520 (Fed. Cir. 2012). Sprint invites the court to construe the meaning of a call destination as the final point on the path of a call. But if Sprint “desired such a narrow definition, it could (and should) have sought a construction to that effect.” ePlus, 700 F.3d at 520; see also Hewlett-Packard Co. v. Mustek Sys., Inc., 340 F.3d 1314, 1321 (Fed. Cir. 2003) (“[W]here the parties and the district court elect to provide the jury only with the claim language itself, and do not provide an interpretation of the language in the light of the specification and the prosecution history, it is too late at the JMOL stage to argue for or adopt a new and more 'detailed interpretation of the claim language and test the jury verdict by that new and more detailed interpretation. The verdict must be tested by the charge actually given and by giving the ordinary meaning of the language of the jury instruction.”). “In the absence of such a construction, however, the jury was free to rely on the plain and ordinary meaning of the term.... ” ePlus, 700 F.3d at 520. And Sprint “has not met its burden of showing that it has the only reasonable view of the ■claim [limitation]....” Avid Tech., Inc. v. Harmonic, Inc., 812 F.3d 1040, 1048 (Fed. Cir. 2016). As the district court correctly explained, the jury could have “reasonably look[ed] at the claims and conclude[d] that the word !a’ before the first use-of the term call destination implied that there could be more than one destination” rather than exclusively referring to the call’s final destination. J.A. at 54.

In light of this, the jury reasonably relied on Dr. Burger’s testimony that the relevant accused call flows were routed to at least one call destination. Dr. Burger testified that the various servers inside the IMS core, such as the MGC and the SBC, were call destinations because the CSCF routed calls to those servers. Id. at 4439, 4541-42. This testimony from Dr. Burger did not, as Sprint suggests, invite the jury to find that any point along the accused call flows was a “call destination.”. These were specific servers in the IMS core.

Sprint’s complaints regarding the “identifier of a second party” limitation in claim 27 of the ’008 Patent are similar to those that it lodges against the “call destination” limitation in claims 1 and 13. See Appellant Br. at 45. But for the reasons we reject that a “call destination” must be the final point on a path of a call, we also reject that an “identifier of a second party” must be a “unique identifier of a second party.” First, if Sprint wanted this restrictive construction of the term, it should have sought one. But it never did and now is too late. See ePlus, 700 F.3d at 520; see also Hewlett-Packard, 340 F.3d at 1321. Second, the jury reasonably relied on Dr. Burger’s testimony that the term means “how you get to [a] second party” and that DNS signaling in the IMS core determined an identifier of a second party, which could include the SBC inside the IMS core. See J.A. at 4539-41.

Because substantial evidence demonstrates that the “call destination” limitation in claims 1 and 13 and the “identifier of a second party” limitation in claim 27 were met, we sustain the jury’s verdict that Sprint infringed these claims of the ’008 Patent.

C. Construction of “Parsing” in Asserted Claims of the ’916 Patent and the ’046 Patent

Sprint also attacks the district court’s claim construction of the term “parsing” in the asserted claims of the ’916 Patent and the ’046 Patent. See Appellant Br. at 50-57. Specifically, Sprint faults the district court for refusing to find disclaimers in the prosecution histories and imposing limitations on the scope of “parsing.” Id. at 50. But Sprint fails to identify any prejudice associated with the district court’s claim construction as it never explains in its opening brief how its purportedly correct and narrower claim construction would have affected the infringement verdict. See CytoLogix, 424 F.3d at 1174.

Sprint notes that page fifty of its opening brief explained how it was prejudiced. Reply Br. at 21 n.7 (citing Appellant Br. at 50). We disagree. For example, Sprint does not explain how the relevant accused call flows do not practice the asserted claims under its narrower claim construction. Sprint has thus waived any arguments concerning how it was prejudiced by a broader construction of “parsing.” See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006) (“Our law is well established that arguments not raised in the opening brief are waived.” (citation omitted)); see also Fresenius USA, Inc. v. Baxter Int'l, Inc., 582 F.3d 1288, 1304 (Fed. Cir. 2009) (“[The appellant] failed to clearly explain what result would occur if this court adopted [the appellant’s] proposed claim constructions. [The appellant] gave this court little guidance and cited no record support regarding why a modified claim construction would affect the infringement judgment, the validity judgment, or both. For that reason alone, we may decline to consider [the appellant’s] claim construction arguments.”). Consequently, we sustain the jury’s verdict that Sprint infringed the asserted claims of the ’916 Patent and the ’046 Patent.

Even without the waiver, we agree with the district court’s construction of “parsing,” and its rejection of Sprint’s prosecution disclaimer arguments concerning this term. “[F]or prosecution disclaimer to attach, our precedent requires that the alleged disavowing actions ■ or statements made during prosecution be both clear and unmistakable.” Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1325-26 (Fed. Cir. 2003). Where the prosecution history is ambiguous or susceptible to “multiple reasonable interpretations” as to any alleged. disavowal, we decline to find prosecution disclaimer. Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1359 (Fed. Cir. 2003); Omega Eng’g, 334 F.3d at 1325.

The district court construed “parsing” as “[a]n automated process of analyzing a string according to a set of rules of a grammar.” J.A. at 40. But Sprint seeks, a narrower construction, contending that during the reexaminations of the ’916 Patent and the ’046 Patent, “Comcast distinguished ‘parsing’ from ‘predetermined association’ and other processes such as ‘mapping,’ ‘lookup,’ and ‘translating’” to avoid having the asserted claims rejected. Appellant Br. at 52. While Comcast did make statements indicating that such processes are not the same as “parsing,” when read in context, we do not read those statements as necessarily excluding any form of these' processes from “parsing.” See, e.g., Lucent Techs., Inc. v. Gateway, Inc., 525 F.3d 1200, 1211-12 (Fed. Cir. 2008) (“[T]he arguments made by the applicants during prosecution clearly distinguish the claimed method from that of [the prior art], but do not constrain the definition of [the disputed claim term] as urged by the defendants.”). Accordingly, we see no reason to disturb the district court’s claim construction or the jury verdict.

D. Prejudgment Interest

After an infringement finding, “the court shall award ... damages adequate to compensate for the infringement ... together with interest and costs.... ” 35 U.S.C. § 284 (2012). “[P]rejudgment interest should be awarded under § 284 absent some justification for withholding such an award.” Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 657, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983); see also Energy Transp. Grp., Inc. v. William Demant Holding A/S, 697 F.3d 1342, 1358 (Fed. Cir. 2012). We review the district court’s award of prejudgment interest for an abuse of discretion. Gen. Motors Corp., 461 U.S. at 657, 103 S.Ct. 2058; see also Energy Transp. Grp., 697 F.3d at 1358.

Sprint contends that the district court erroneously charged Comcast prejudgment interest from 2006 forward even though neither the ’008 Patent nor the ’046 Patent had issued at that point. Appellant Br. at 57-64. Specifically, because neither of those two patents had issued yet, there could be no infringement as a matter of law for them in 2006. In' Sprint’s view, accordingly, the district court’s award of prejudgment interest was an abuse of discretion because the court should have calculated prejudgment interest from the time of first infringement of each of the three infringed patents until judgment. In other words, Sprint contends the district court should have apportioned the prejudgment interest calculations based on the royalty periods covered by the individual patents. See id. While in other contexts Sprint’s contentions might be well taken, they are not here.

The parties’ experts agreed that any damage award should take the form of a lump sum royalty payment. And, the jury was told that the lump sum royalty payment should run from the date of the earliest relevant hypothetical negotiation. Specifically, Comcast’s damages expert, Ms. Carla Mulhern, explained to the jury how it was to calculate damages as follows:

Q. So when would this hypothetical negotiation have taken place had it actually taken place?
A. The hypothetical negotiation is set at the time of first infringement. So, in this case, it’s a little complicated because we have multiple patents.
So if the ’916 [Pjatent is found to be infringed by Sprint, the hypothetical negotiation would have occurred at the time of first infringement of the ’916 [Pjatent, which is in late 2006....
If Sprint is not found to have infringed the ’916 [Pjatent, but only either the ’046 or ’008 patents, which issued much later, then the hypothetical negotiation would occur in 2012 at the time of first infringement of those patents.

J.A. at 4593-94. Sprint’s damages expert Dr. Debra Aron agreed with Ms. Mul-hern’s statements on the timing of the hypothetical negotiation:

Q. You agree with Ms. Mulhern that if the ’916 [Pjatent or any combination of patents that includes the ’916 [Patent] is found to be infringed, then the appropriate date for the hypothetical negotiation for all infringed patents in this case is late 2006; correct?
A. Yes, that’s right.
Q. And the analysis that both you and Ms. Mulhern have done, you understand is directed to a lump sum royalty through the time of trial; correct?
A. That’s what it should be, yes.
Q. And you and she agree on that point; correct?
A. I think we agree on that point.

Id. at 4974-75. The jury was also told that the hypothetical negotiators would have employed the “book of wisdom,” looking forward in time from the date of the first hypothetical negotiation to account for “all information that would have been relevant to the parties in coming to and arriving at a deal.” Id. at 66; id. at 4594-95. Both experts agreed that this information would have included the issuance of any later patent relating to the same technology. Id. at 4593-95; id. at 5002-03.

As the verdict form reflects, the jury found that claims in all three of the Low patents were infringed. Id. at 46-47. And as it was invited to do, the jury then awarded Comcast a lump sum royalty in the amount of $7.5 million. Id. at 47. That award necessarily was predicated on a hypothetical negotiation occurring in 2006. Because the jury found the ’916 Patent infringed and the hypothetical negotiation to have occurred in 2006 there was only one damage award' for the district court to consider when assessing the dollar figure against which prejudgment interest should be measured and the date from which it was to run. There was, accordingly, neither a basis for the district court to apportion prejudgment interest nor a need for the district court to undertake such apportionment.

Prejudgment interest runs from the earliest date of infringement for any patent issued at the time of the hypothetical negotiation; here, the ’916 Patent indisputably had been issued by 2006. We see no abuse of discretion in the district court’s assessment of prejudgment interest against Sprint based on the entire royalty award. See Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 807 F.2d 964, 969 (Fed. Cir. 1986) (“[T]he purpose of prejudgment interest ... is ‘to ensure that the patent owner is placed in as good a position as he would have been had the infringer entered into a reasonable royalty agreement.’ ” (quoting Gen. Motors Corp., 461 U.S. at 655, 103 S.Ct. 2058)); cf. Stickle v. Heublein, Inc., 716 F.2d 1550, 1561 n.8 (Fed. Cir. 1983) (“Since' the parties treated the mechanical and process patents as a unitary licensing property, we need not consider damages for infringement of each patent individually. Under other circumstances it may well be necessary to determine damages separately for each such patent since a patent owner has every right to demand royalties for each patent he holds.”).

Conclusion

For the preceding reasons, we AFFIRM the judgment entered by the district court.

      . The Low Patents share the same specification so we cite to the ’008 Patent for convenience.

      . Other patents from the Low family were also asserted against Sprint, but they are irrelevant to this appeal as they were not part of the trial.

      . In moving for a new trial before the district court, Sprint merely rehashed its arguments for why it deserved judgment as a matter of law. Because we assess those arguments in the context of its JMOL motion, we need not address them again in the context of its motion for a new trial.

      . Claim 27 reads:
      A method, comprising:
      receiving a request from a first party; determining by a computer, responsive to the request, an identifier of a second party using domain name system signaling; setting up a call through the switched telecommunication system between the first party and the second party that was determined as a result of said domain name system signaling.

      . The district court properly rejected Sprint’s suggestion that it could have determined what portion of the jury’s award was attributable to each patent, based on the damages methodology employed by Ms. Mulhern. See J.A. at 66. The jury’s award was less than half of what Ms. Mulhern proposed, thereby indicating that the jury did not actually follow her proposal. See Appellee Br. at 6.0 (citing J.A. at 47, 4635).


author: PROST, Chief Judge.

text:
    INTELLECTUAL VENTURES I LLC, Intellectual Ventures II LLC, Plaintiffs-Appellants v. ERIE INDEMNITY COMPANY, Erie Insurance Exchange, Erie Insurance Property & Casualty Company, Erie Insurance Company, Flagship City Insurance Company, Erie Family Life Insurance Company, Old Republic General Insurance Group, Inc., Old Republic Insurance Company, Old Republic Title Insurance Group, Inc., Old Republic National Title Insurance Company, Defendants-Appellees
    2016-1128, 2016-1132
    United States Court of Appeals, Federal Circuit.
    Decided: March 7, 2017

      Christian John Hurt, Nix Patterson & Roach LLP, Dallas, TX, argued for plaintiffs-appellants. Also represented by Derek Tod Gilliland, Daingerfield, TX.
    Gregory H. Lantier, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, argued for defendants-appellees Erie Indemnity Company, Erie Insurance Exchange, Erie Insurance Property & Casualty Company, Erie Insurance Company, Flagship City Insurance Company, Erie Family Life Insurance Company. Also represented by Richard Anthony Crudo, James Quarles, III; Monica Grewal, Boston, MA; David Charles Marcus, Los An-geles, CA.
    Vernon M. Winters, Sidley Austin LLP, San Francisco, CA, argued for defendants-appellees Old Republic General Insurance Group, Inc., Old Republic Insurance Company, Old Republic Title Insurance Group, Inc., Old Republic National Title Insurance Company. Also represented by Alexander David Baxter; Erik John Carlson, Los Angeles, CA; Russell E. Cass, Chicago, IL.
    Before PROST, Chief Judge, WALLACH and CHEN, Circuit Judges.
   PROST, Chief Judge.

Intellectual Ventures I LLC and Intellectual Ventures II LLC (collectively, “IV’) appeal from a final decision of the United States District Court for the Western District of Pennsylvania finding all claims of U.S. Patent No. 6,510,434 (“’434 patent”), U.S. Patent No. 6,519,581 (“’581 patent”), and U.S. Patent No. 6,546,002 (“’002 patent”) ineligible under 35 U.S.C. § 101, and dismissing IVs infringement claims of the ’581 patent for lack of standing. For the reasons discussed below, we affirm-in-part, vacate-in-part, and remand-in-part.

I

IV sued Erie Indemnity Company, Erie Insurance Exchange; Erie Insurance Property & Casualty Company; Erie Insurance Company; Flagship City Insurance Company; Erie Family Life Insurance Company (collectively, “Erie”); Old Republic General Insurance Group, Inc.; Old Republic Insurance Company; Old Republic Title Insurance Group, Inc.; Old Republic National Title Insurance Company; Highmark, Inc.; Hm Insurance Group, Inc.; Hm Life Insurance Company; High-mark Casualty- Insurance Company; and Hm Casualty Insurance Company (collectively, “Appellees”), alleging infringement of the ’581 patent, the ’434 patent, and the ’002 patent (collectively, “patents-in-suit”) in the United States District Court for the Western District of Pennsylvania. In response, Appellees moved to dismiss IVs ’581 patent infringement claims under Rule 12(b)(1) for lack of standing. Appel-lees also moved under Rule 12(b)(6), arguing that the claims of the ’581, ’434, and ’002 patents are directed to ineligible subject matter under 35 U.S.C § 101.

After concluding that IV did not own the rights to the ’581 patent, the district court granted Appellees’ motion under 12(b)(1) for lack of standing. In reaching this conclusion, the district court found that a particular assignor did not assign any rights in or to the then-pending application to the ’581 patent, thus breaking a chain in ownership of the patent. J.A. 24. Moreover, the district court dismissed IV’s infringement claims under Rule 12(b)(6), finding that all claims of the three patents-in-suit were ineligible under § 101. J.A. 77. In its appeal, IV argues that the district court erred in dismissing its claims under Rule 12(b)(1) and 12(b)(6). We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

On appeal, IV raises a number of issues regarding the proceedings below: (1) IV appeals the district court’s dismissal of its infringement claims of the ’581 patent for lack of standing and its determination that the ’581 patent is directed to ineligible subject matter under § 101; (2) IV appeals the district court’s determination that the ’434 patent is directed to ineligible subject matter under § 101; and (3) IV appeals the district court’s determination that the ’002 patent is directed to ineligible subject matter under § 101. We take each issue in turn.

A

1

First, we consider the district court’s dismissal of IV’s infringement claims under Rule 12(b)(1) as they relate to the ’581 patent. Our review of the district court’s dismissal for lack of standing under 12(b)(1) is de novo. Abbott Point of Care Inc. v. Epocal, Inc., 666 F.3d 1299, 1302 (Fed. Cir. 2012). We apply state law to contractual disputes and interpretations of the parties’ patent assignment agreements. Semitool, Inc. v. Dynamic Micro Sys. Semiconductor Equip. GmbH, 444 F.3d 1337, 1341 (Fed. Cir. 2006). For this particular dispute, California law applies. See Erie Resp. Br. 6 (noting that the parties executed the agreement underlying this matter in California); Appellants’ Br. 18 (recognizing party agreement that California law governs). Because contract interpretation is a legal determination, the parties’ contract dispute is reviewed without deference on appeal. Semitool, 444 F.3d at 1341.

The ’581 patent issued from a continuation patent application of U.S. Patent No. 6,236,983 (“’983 patent”). After a series of assignments, the rights to the ’581 patent (then, a pending application) and the ’983 patent were assigned to AllAdvan-tage.com. J.A. 837-54. This assignment agreement expressly assigned the ’983 patent and any continuation of that patent to AllAdvantage.com. The parties do not dispute that this assignment covered the then-pending application to the ’581 patent and that AllAdvantage.com owned both that application and its parent (the ’983 patent) upon execution of this agreement. See, e.g., Erie Resp. Br. 5-6. Less than six months later, AllAdvantage.com assigned various patents (including the ’983 patent) and certain pending applications to Alset. J.A. 805-06 (“the Alset Agreement”). Although this agreement expressly identified the various patents and pending applications subject to assignment — including the ’983 patent and several of its pending foreign patent application counterparts — it did not explicitly list the ’581 patent’s then-pending application. Id.

In addition to its express identification and assignment of particular assets, this agreement included a more general grant clause: “Assignor, does hereby assign unto Assignee, all right, including common law rights, title and interest in the United States of America ... in and to said patents together with the goodwill of the business symbolized by said patents and applications and registrations thereof.” J.A. 806. Approximately one year after the execution of this agreement, the U.S. Patent and Trademark Office (“PTO”) issued the ’581 patent. Several years later, Alset assigned the ’581 patent to an TV entity that later recorded that assignment with the PTO. J.A. 862-64. In light of this framework, the district court held that Al-set did not convey title to the ’581 patent. J.A. 24. We conclude that the Alset Agreement did not include an assignment of rights to the ’581 patent and therefore affirm the district court’s Rule 12(b)(1) dismissal on that ground.

Under Title 35, only patentees and their successors in title to a patent may bring an action for infringement. 35 U.S.C. §§ 261, 281. IV argues that although the Alset Agreement did not expressly identify the ’581 patent’s then-pending application, the agreement transferred title because the parties intended for the assignment to cover this asset. To demonstrate intent, IV identifies two portions of the agreement’s general grant clause it believes support its position (reproduced below with emphasis added to the two areas of IV’s focus): “Assignor, does hereby assign unto As-signee, all right, including common law rights, title and interest in the United States of America ... in and to said patents together with the goodwill of the business symbolized by said patents and applications and registrations thereof.” J.A. 806. Specifically, IV argues that the “in and to said patents” and “goodwill of the business symbolized by said patents” portions of this clause each — individually and independently — support its position. We disagree.

Under California law, “[a] contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” Cal. Civ. Code § 1636 (West 2016). “The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” Id. § 1638. When (as here) “a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible.” Id. § 1639. A court also'may consider' evidence extrinsic to a contract under certain circumstances. See, e.g., Wolf v. Superior Court, 114 Cal.App.4th 1343, 8 Cal.Rptr.3d 649, 656 (2004) (citing the California Supreme Court).

At the outset, first we must determine whether and to what extent the parties’ extrinsic evidence affects the meaning of these two portions of this clause. “Where the meaning of the words used in a contract is disputed, the ... court must provisionally receive any proffered extrinsic evidence which is relevant to show whether the contract is reasonably susceptible of a particular meaning.” Id. at 655 (citation and internal quotation marks omitted) (citing the California Supreme Court). Thus, contract interpretation under California law is a two-step process. “First the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine ‘ambiguity,’ i.e., whether the language is ‘reasonably susceptible’ to the interpretation urged by a party.” Id. at 656 (citation omitted). “If in light of the extrinsic evidence the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step — interpreting the contract.” Id. (citation omitted).

IV identifies extrinsic evidence that it contends shapes the meaning of the “in and to” and the “goodwill of the business symbolized” language and demonstrates that the par-ties originally intended to assign the ’581 patent. Specifically, IV observes that upon execution, Alset recorded the assignment at the PTO and represented in its terminal disclaimer that it owned all the rights to the ’581 patent. Moreover, IV notes that Alset filed updated power of attorneys and paid the ’581 patent’s issuance fee.

Upon provisional consideration of the extrinsic evidence IV proffered, we agree with the district court’s conclusion that there is no ambiguity within the Al-set Agreement that could render it reasonably susceptible to TV’s interpretation. The assignment itself expressly listed the seventeen patents and applications that the parties intended to transfer, with clear language that conveyed the rights, “in and to,” and “goodwill of the business symbolized by,” those explicitly identified assets. J.A. 806. In the context of this agreement, IV’s proffered evidence neither resolves any ambiguity nor shapes the meaning of the words contained within the general grant clause. Although this evidence may lead one to reasonably conclude that Alset believed it owned the ’581 patent at some later point in time, it would be error for us to rewrite the parties’ agreement to include that which was plainly not included. Indeed,

[i]f the plain language of the instrument is unambiguous, a court may not “read into” the document additional terms in order to conform its meaning to what the court’s “intuition” tells it the parties must have intended. Rather, the court “is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted....”

PV Little Italy, LLC v. MetroWork Condo. Assn., 210 Cal.App.4th 132, 135, 148 Cal.Rptr.3d 168 (2012) (citing Cal. Civ. Proc. Code § 1858 (West 2016)). Taken together, the Alset Agreement is not reasonably susceptible to IV’s proffered interpretation and, thus, we need not consider the extrinsic evidence advanced by IV. See Producers Dairy Delivery Co. v. Sentry Ins. Co., 41 Cal.3d 903, 226 Cal.Rptr. 558, 718 P.2d 920, 925 (1986) (explaining that a court should not consider extrinsic evidence “if the evidence offered would not persuade a reasonable naan that the instrument meant anything other than the ordinary meaning of its words” (alternations, citation, and internal quotation marks omitted)). Because we conclude that IV’s extrinsic evidence does not lend this clause reasonably susceptible to IVs interpretations, we move to IV’s two specific arguments applying a plain meaning interpretation to the contract. See Wolf, 114 Cal.App.4th at 1356, 8 Cal.Rptr.3d 649.

First, regarding “in and to said patents,” IV argues that the agreement automatically incorporated rights to the then-pending ’581 application because as a continuation, it is necessarily bound to the same inventive subject matter of its parent. IV predicates its argument on the patents’ familial relationship because the grant clause conveyed rights “in and to” the subject matter of the parent patent (not simply just title to it). We conclude that the “in and to said patents” language does not support IVs position. Patents, applications for patents, or any interest therein, must be assigned by an instrument in writing. 35 U.S.C. § 261. In assigning ownership rights here, the parties limited their written instrument to the seventeen patents and applications expressly listed in that agreement. J.A. 805-06 (including the ’983 patent, but not the then-pending ’581 patent’s application). It does not mention either the application that led to the ’581 patent or the ’581 patent itself, J.A. 805-06, a point that IV concedes, Appellants’ Br. 22. It does not disclose that continuation applications or other family members of the enumerated patents are assigned. J.A. 805-06. That several patent applications appear in the Alset Agreement suggests that, if AllAdvantage intended to convey the application leading to the ’581 patent to Alset, it knew how to do so.

Turning to the broader language of the agreement, IV has not demonstrated that the rights “in and to” a particular patent automatically include its child applications. Rather, IV seems to conflate the meaning of the word “patent,” as used in the agreement, with “invention”; the latter which we held conveyed rights to continuation applications. See DDB Techs., 517 F.3d at 1290. Thus, this language did not convey any rights, and a conclusion otherwise would directly conflict with the plain language of the agreement. For example, if the “in and to said patents” language automatically conveyed the rights to all applications within the family of those expressly identified, the agreement need not list the ’983 patent’s foreign counterpart applications either. But as Erie correctly observes, the agreement listed three of the ’983 patent’s foreign applications. J.A. 805; Erie Resp. Br. 31. The agreement did not, however, list the then-pending ’581 patent application. J.A. 805-06. We thus conclude that the “in and to said patents” language did not convey any rights to the ’581 patent.

Second, regarding the “goodwill of the business symbolized by said patents and applications” portion of the agreement, IV argues the goodwill assigned here includes the right to commercialize or license the patented invention through the expiration of the ’983 patent as part of its patent monopoly. To support this contention, IV refers again to the terminal disclaimer Al-set filed and cites Scott Paper Co. v. Marcalus Manufacturing Co., 326 U.S. 249, 66 S.Ct. 101, 90 L.Ed. 47 (1945). IV relies on this case to support its position that the exclusion of the ’581 patent would necessarily devalue this goodwill if it were unable to commercialize the invention without risk of infringing the ’581 patent. IV maintains if legal title to the common inventive subject matter were severed, Alset could not receive the goodwill relating to the enjoyment of the patent monopoly in the ’983 patent unless it received rights to the ’581 patent as well.

Similar to the “in and to said patents” portion discussed above, we conclude that the agreement’s “goodwill of the business symbolized by said patents and applications” portion did not transfer title to the ’581 patent as well. IV largely predicates its arguments on the assumption that the agreement assigned the goodwill of the ’983 patent itself. It did not. Rather, the plain language of the agreement assigned the “goodwill of the business symbolized by [the ’983 patent].” J.A. 806 (emphasis added). At best, this portion of the Alset Agreement assigned the goodwill of the resulting commercial exploitation of the patent. Indeed, IVs citation to Scott Paper actually supports the conclusion that goodwill is something other than the patent instrument itself. In that case, the Supreme Court referred to the goodwill in the context of “the patented article or product.” Scott Paper, 326 U.S. at 256, 66 S.Ct. 101. In other words, goodwill here refers to the goodwill resulting from the commercial exploitation of the products covered by the ’983 patent. But IVs commercial exploitation of the ’983 patent bears no relevance to the ’581 patent instrument itself. Because goodwill cannot sweep in patents not expressly listed in the parties’ agreement, this portion of the grant clause did not transfer any rights in the ’581 patent either.

Because we conclude that the Alset Agreement did not convey any rights to the ’581 patent, IV lacked standing to bring suit on that patent. Accordingly, we affirm the district court’s Rule 12(b)(1) dismissal for lack of standing.

2

In addition to finding that IV lacked standing to assert infringement of the ’581 patent against Erie and Old Republic, the district court concluded that the ’581 patent is directed to an abstract idea and otherwise lacks an inventive concept, such that it is patent-ineligible under § 101. See IV, 134 F.Supp.3d at 909-17. We must vacate this aspect of the district court’s decision.

Because IV lacks standing to assert infringement of the ’581 patent, we may not address that patent’s validity under § 101. When the party that filed suit is not the “patentee” under § 281 and otherwise fails to join the patentee to the suit, we dismiss all claims based on the subject patent. See, e.g., Diamond Coating Techs., LLC v. Hyundai Motor Am., 823 F.3d 615, 618-19 (Fed. Cir. 2016). And when the patentee has not joined the action, we may not consider the merits of an affirmative defense directed to the patent in question, such as patent-eligibility under § 101. See, e.g., Bd. of Trs. of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 848-49 (Fed. Cir. 2009) (“Stanford ... lacks standing to assert its claims of infringement.... Thus, the district court lacked jurisdiction over Stanford’s infringement claim and should not have addressed the validity of the patents.... The district court’s grant of summary judgment of invalidity is therefore vacated, and the case is remanded with instructions to dismiss Stanford’s claim for lack of standing.” (citation omitted)). Without the patentee joining suit, courts may not make findings about the ’581 patent against which the patentee has had no opportunity to defend. We therefore vacate the district court’s summary judgment order of invalidity as to this patent and remand with instructions to dismiss all claims based on the ’581 patent.

B

Next, IV appeals the district court’s dismissal of its patent infringement claims relating to the ’434 patent for reciting ineligible subject matter under § 101.

We review the district court’s dismissal under Rule 12(b)(6) according to the law of the regional circuit. Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Assn., 776 F.3d 1343, 1346 (Fed. Cir. 2014). The Third Circuit applies a de novo standard of review to motions to dismiss under Rule 12. Sands v. McCormick, 502 F.3d 263, 267 (3d Cir. 2007). Patent eligibility under § 101 is an issue of'law to which we review without deference. OIF Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015).

Section 101 of the Patent Act defines patent-eligible subject matter: “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 therefore, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. In interpreting this statutory provision, the Supreme Court has held that its broad language is subject to an implicit exception for “laws of nature, natural phenomena, and abstract ideas,” which are not patentable. Alice Corp. v. CLS Bank Int’l, - U.S. -, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014).

To determine whether the exception applies, the Supreme Court has set forth a two-step inquiry. Specifically, a court must determine: (1) whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea; and if so, (2) whether the elements of the claim, considered “both individually and ‘as an ordered combination,’ ” add enough to “ ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 132 S.Ct. 1289, 1297-98, 182 L.Ed.2d 321 (2012)). Applying this two-step process to claims challenged under the abstract idea exception, we typically refer to step one as the “abstract idea” step and step two as the “inventive concept” step. Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016).

Under the “abstract idea” step we must evaluate “the ‘focus of the claimed advance over the prior art’ to determine if the claim’s ‘character as a whole’ is directed to excluded subject matter.” Id. (citation omitted). If the concept is directed to a patent-ineligible concept, we proceed to the “inventive concept” step. For that step we must “look with more specificity at what the claim elements add, in order to determine ‘whether they identify an “inventive concept” in the application of the ineligible subject matter’ to which the claim is directed.” Id. at 1258 (quoting Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).

Turning to the invention, the ’434 patent contains, twenty-eight claims relating to methods and apparatuses that use an index to locate desired information in a computer database. According to the patent, prior art datábase searching methods were inefficient and often returned many false positives. ’434 patent col. 1 ll. 40-44. The patent explains that a prior art database search for records containing the term “Ford,” for example, may return hits related to the Ford Company, Ford Theatre and the Ford brand of trucks. Thus, a searcher interested only in information related to Ford trucks would need to sift through a potentially large number of false hits to locate the desired information.

The ’434 patent proposes to search the database using an index, which “is essentially a guide to the records of the database.” Id. at col. 2 11. 39-41. According to the ’434 patent, every record in the database is associated with one or more descriptive terms. For example, a database record for a restaurant that serves Chinese food, accepts AMERICAN EXPRESS and offers valet parking could be associated with the terms “Chinese,” “AMERICAN EXPRESS,” and “valet parking.” Id. at col. 7 11. 46-55. The database index in turn organizes this information using a series of “tags,” notably category tags and domain tags. The “category” tags comprise a grouping of similar terms. For example, a “Cuisine” category tag could include the terms “Chinese,” “Mexican,” and “American.” And the “domain” tags describe a grouping of similar categories. A “Restaurant” domain tag could include categories such as the “Cuisine” category, as well as other categories relevant to Restaurants, such as “Payment Option” and “Amenities.” Each record in the database includes an index component that identifies the category and domain tags associated with that record. In the preferred embodiment, each tag is written in the well-known extensible Markup Language (XML). Id. at col. 9 11. 14-17. Each tag also has an associated metafile that provides additional information about the tag, such as its relationship to other tags and its place in the index’s hierarchical structure. .

When the system receives a search request, a set of tags that corresponds to the request is somehow identified by the system. And the system uses that set of tags to search for records that have an index component identifying the same set of tags. In other words, if the user looking for a restaurant searches for “American with valet parking,” the claimed system would identify and return database records having both “Cuisine” and “Amenities” tags in their associated index component. If those tags have associated metafiles, the system may utilize the available metadata to help refine the search. The system may, for example, determine that the term “American” is also associated with other category tags, such as “Brand,” “Language,” and the like. The system may then attempt to resolve the ambiguity by querying the user to choose cuisine or brand before returning the database records.

IV identifies independent claims 1 and 19 as exemplary methods of creating and searching a database, respectively. Claim 1 provides:

1. A method for creating a database and an index to search the database, comprising the steps of:
creating the index by defining a plurality of XML tags including domain tags and category tags;
creating a first metafile that corresponds to a first domain tag;
and creating the database by providing a plurality of records, each record having an XML index component.

Id. at col. 15 ll. 38-45. Claim 19 provides:

19. A method for searching a database of information, comprising the steps of: receiving a request for information from a client, the request having a first term; identifying a first XML tag that is associated with the first term;
determining whether a first metafile corresponds to the first XML tag;
if the first metafile corresponds to the first XML tag, then transmitting the first XML tag, the first metafile and query code to the client;
once the client conducts a query by executing the query code using the first XML tag and the first metafile, then receiving query results including a first set of XML tags from the client;
combining the first set of XML tags into a key;
using the key to search the database to locate records including the first set of XML tags; and delivering the records.

Id. at col. 17 ll. 43-63. Thus, IV contends “[t]he heart of the ’434 patent is improved computer database search technology that utilizes an index constru[ct]ed of tags and metadata to facilitate searches.” Appellants’ Br. 46^47.

1

Under step one, we agree with the district court that the invention is drawn to the abstract idea of “creating an index and using that index to search for and retrieve data.” J.A. 63. As the patent itself observes, the invention relates to “locating information in a database, and ... using an index that includes tags and metafiles to locate the desired information.” Id. at col. 1 ll. 24-26. This type of activity, i.e., organizing and accessing records through the creation of an index-searchable database, includes longstanding conduct that existed well before the advent of computers and the Internet. For example, a hard-copy-based classification system (such as library-indexing system) employs a similar concept as the one recited by the ’434 patent. There, classifiers organize and cross-reference information and resources (such as books, magazines, or the like) by certain identifiable tags, e.g., title, author, subject. Here, tags are similarly used to identify, organize, and locate the desired resource.

We have previously held other patent claims ineligible for reciting similar abstract concepts that merely collect, classify, or otherwise filter data. For example, in In re TLI Communications LLC Patent Litigation, we concluded that the concept of classifying data (an image) and storing it based on its classification is abstract under step one. 823 F.3d 607, 611 (Fed. Cir. 2016). In Content Extraction, we similarly held that the concept of data collection, recognition, and storage abstract as well. 776 F.3d at 1347. More recently, in Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, we held that a claim to a “content filtering system for filtering content retrieved from an Internet computer network” was directed to an abstract idea. 827 F.3d 1341, 1348-49 (Fed. Cir. 2016). Here, the claimed creation of an index used to search and retrieve information stored in a database is similarly abstract.

IV argues that the claims of the ’434 patent are drawn to a specific search architecture that improves how computer databases function, just like the self-referential table claims at issue in Enfish, LLC v. Microsoft Corp. 822 F.3d 1327 (Fed. Cir. 2016). In support of its argument, IV relies heavily on the fact that many of the claims, including representative claims 1 and 19, are directed expressly to building an index using XML tags. IV’s reliance on this known markup language to tether the claimed invention to a specific type of database architecture, however, is unavailing. As an initial matter, not all claims recite these XML tags. Independent claim 7, for example, recites a method of searching a database of records using an index without the need for this XML-based tag. ’434 patent col. 16 ll. 10-23. And the patent itself recognizes that the invention is not necessarily limited to XML language. See id. at col. 15 ll. 19-23 (“Although the present invention has been described in connection with the XML language, those skilled in the art will realize that the invention can also be practiced using other languages that use tags and support the association of a file....”).

Moreover, even if all the claims were so limited, merely using XML tags — as opposed to other kinds of tags — to build an index is still abstract. The claims are not focused on how usage of the XML tags alters the database in a way that leads to an improvement in the technology of computer databases, as in Enfish. Instead, the claims simply call for XML-specific tags in the index without any further detail. The patent concedes that the XML tags were previously known in the art. Id. at col. 8 1. 67-col. 9 1. 4 (observing that “XML is a syntax for creating a markup language that uses a set of tags” that comprises a standard that is maintained by the World Wide Web Consortium). The focus of the claims, therefore, remains at a high level on searching a database using an index. The inclusion of XML tags as the chosen index building block, with little more, does not change that conclusion.

Because we agree with the district court that the heart of the claimed invention lies in creating and using an index to search for and retrieve data, we conclude that the claims here are directed to an abstract concept under Alice and its progeny and, thus, move to step two.

2

In applying step two of the Alice analysis, we must “determine whether the claims do significantly more than simply describe [the] abstract method” and thus transform the abstract idea into patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). We look to see whether there are any “additional features” in the claims that constitute an “inventive concept,” thereby rendering the claims eligible for patenting even if they are directed to an abstract idea. Alice, 134 S.Ct. at 2357. Those “additional features” must be more than “well-understood, routine, conventional activity.” Mayo, 132 S.Ct. at 1298.

Evaluating the representative claims 1 and 19, we agree with the district court that they lack an “inventive concept” that transforms the abstract idea of creating an index and using that index to search for and retrieve data into a patent-eligible application of that abstract idea. J.A. 66-67. IV again argues that the claimed contribution lies in the utilization of an index constructed of specific XML tags and me-tadata to facilitate searches. But the recitation of an index employing XML tags to navigate a computerized database is simply not enough to transform the patent-ineligible abstract idea here into a patent-eligible invention. See Alice, 134 S.Ct. at 2357 (“[C]laims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.”).

The patent admits that an index is simply “a guide that is used to locate information stored in a database.” ’434 patent col. 2 11. 39-41. Furthermore, we fail to see how the patentee’s use of a well-known tag, i.e., XML tag — to form an index— sufficiently transforms the claims into a patent eligible invention. While limiting the index to XML tags certainly narrows the scope of the claims, in this instance, it is simply akin to limiting an abstract idea to one field of use or adding token post solution components that do not convert the otherwise ineligible concept into an inventive concept. See Bilski v. Kappos, 561 U.S. 593, 612, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). Similarly, the metaf-iles associated with these tags do not transform the claim into something beyond a conventional computer practice for facilitating searches. Indeed, the ’434 patent describes these metafiles as mere indicators that provide additional information about the tags hierarchical structure in the index. Id. at col. 2 ll. 60-62. The use of metafiles to build the claimed index is yet another natural consequence of carrying out the abstract idea in a computing environment and is, therefore, also insufficient to transform a patent-ineligible abstract idea into a patent-eligible invention. In this case, the claims do not sufficiently recite how the inclusion of XML tags or metada-ta leads to an improvement in computer database technology through some “non-conventional and non-generic arrangement of known, conventional pieces.” Bascom, 827 F.3d at 1349-52.

Moreover, the remaining limitations recite routine computer functions, such as the sending and receiving information to execute the database search, e.g., receiving a request for information and delivering records. These are no more than the “performance of ‘well-understood, routine, [and] conventional activities previously known to the industry.’” Content Extraction, 776 F.3d at 1347-48 (citation omitted). Thus, while the claims necessarily cabin the idea of categorical data search and retrieval to a computer environment, the claimed computer functionality can only be described as generic or conventional.

Accordingly, evaluating these claimed elements either individually or as an ordered combination, we conclude that claimed steps recite no more than routine steps involving generic computer components and conventional computer data processing activities to accomplish the well-known concept of creating an index and using that index to search for and retrieve data.

C

Third, and finally, IV appeals the district court’s dismissal of IVs claims relating to the ’002 patent for reciting ineligible subject matter under § 101.

The ’002 patent contains forty-nine claims relating to systems and methods for accessing a user’s remotely stored data and files. The inventor of the ’002 patent perceived a need to improve the accessibility of data stored across a user’s disparate electronic devices. The specification explains “[i]t is not uncommon for many users to have multiple computers, PDAs, and other computer-related devices. Each individual computer or PDA may include specific menu items and bookmarks that do not exist in another computer or PDA.” ’002 patent col. 2 ll. 35-40. “For example, a computer used at work may be the only device that includes a spreadsheet program while a computer used at home may be the only device that includes bookmarked URLs. Thus, the user will not have access to the bookmarks from the user’s work computer and likewise, will not have access to the spreadsheet program from the user’s home computer.” Id. at col. 2 ll. 40-46.

To solve this problem, the ’002 patent discloses a “mobile interface” that can be called up on the user’s computer or mobile device. That mobile interface displays a plurality of pointers to user-specific resources and information stored on the user’s various devices. These pointers, “similar to bookmarks used in web browsers,” ’002 patent at col. 8 1. 34, purportedly allow the user to retrieve and access remotely stored documents, applications, images and the like, irrespective of the user’s location or device. Claim 40 is representative:

40. A system for storing and accessing user specific resources and information, the system comprising:
a network for accessing the user specific resources and information stored in a network server;
and a local device communicating with the network and having a local memory and a mobile interface, wherein the local memory also includes user specific resources and information, and the mobile interface includes pointers corresponding to the user specific resources and information that are stored either on the local device or the network server, wherein the pointers provide links to access the corresponding user specific resources and information.

Id. at col. 19 l. 47-col. 20 l. 6. In other words, the claimed invention is directed to a “mobile interface” on a user’s device that is capable of accessing the user’s data stored anywhere, whether on the user’s device or elsewhere on a remote network server.

1

In analyzing the claims under step one, the district court determined that the invention is drawn to the idea of “remotely accessing user specific information.” J.A. 72. We agree with this conclusion. As the patent itself observes, the invention provides “a system and method that allows a user to access specific documents, files, programs ... from any computer device located in a geographic location.” ’002 patent col. 3 1. 66-col. 4 1. 4. Remotely accessing and retrieving user-specified information is an age-old practice that existed well before the advent of computers and the Internet.

IV argues that the claimed mobile interface is a particular software-driven machine that performs specific operations to solve a problem unique to the field of computer networks. Yet the claimed invention does not recite any particular unique delivery of information through this mobile interface. Rather, it merely recites retrieving the information through the mobile interface. Nor do the claims describe how the mobile interface communicates with other devices or any attributes of the mobile interface, aside from its broadly recited function. Thus, the mobile interface here does little more than provide a generic technological environment to allow users to access information. And as we have previously observed, “[a]n abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment, such as the Internet.” Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1366 (Fed. Cir. 2015) (“Intellectual Ventures I”). We conclude therefore that the ’002 patent’s concept of remotely accessing user-specific information is abstract, and thus fails under step one.

2

Under step two, we conclude that the claims recite no “inventive concept” to transform the abstract idea of remotely accessing user-specific information into a patent eligible application of that abstract idea. Rather, the claims merely recite generic, computer implementations of the abstract idea itself.

IV places great emphasis on the claims’ recitation of a mobile - interface' and its associated pointers. IV argues that the ’002 patent overrides the routine use of pointers, e.g., in the context of a local system, by intelligently accessing and combining them through the mobile interface to retrieve remotely-stored data. See, e.g., Appellants’ Br. 62 (“All of the claims are limited to- a specific use of multiple pointers to retrieve the user-specific data via a mobile interface in a network with a server and local de[v]ice.”). According to IV, this provides users with access to their files and data from any location irrespective of the device used.

We, however, conclude that the claims do not sufficiently recite an inventive concept that transforms the abstract idea into a patent-eligible invention. The recited use of a mobile interface and pointers to retrieve user information evidences nothing more than a “generic computer implementation” of the abstract idea that is insufficient to transform a patent-ineligible abstract idea into a patent-eligible invention. Alice, 134 S.Ct. at 2357. The ’002 patent does not provide an inventive solution to a problem in implementing the idea of retrieving user-specified information; it simply recites that the abstract idea will be implemented using the conventional components and functions generic to electronic mobile devices. These recited features are simply “conventional steps, specified at a high level of generality.” Ultramerical, 772 F.3d at 716 (citation omitted).

The claimed mobile interface is so lacking in implementation details that it amounts to merely a generic component (software, hardware, or firmware) that permits the performance of the abstract idea, i.e., to retrieve the user-specific resources. Further, this interface provides no more than similar user interfaces recited in claims that we have previously held ineligible. See, e.g., Intellectual Ventures I, 792 F.3d at 1369-70; Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1344-45, 1348-49 (Fed. Cir. 2015). As in those cases, the ’002 patent’s interface merely provides a generic, functionally recited component “tasked with tailoring information and providing it to the user.” Intellectual Ventures I at 1370-71. And the mobile interface’s incorporation of pointers is not sufficient to transform the abstract concept either. The mobile interface relies on these pointers to retrieve user resources and information over the network so that a user may view them. But receiving transmitted dáta over a network ánd displaying it to a user merely implicates purely conventional activities that are the “most basic functions of a computer.” Alice, 134 S.Ct. at 2359. As the ’002 patent observes, pointers themselves are conventional, as is the manner in which the claims employ them in conjunction with the mobile interface. ’002 patent col. 1 ll. 34-38.

Finally, we find unconvincing IV’s argument that the claimed mobile interface and pointers carry out more than their routine functions because they allow users to retrieve previously inaccessible information, regardless of location or format. Nowhere do the claims recite elements or components that describe how the invention overcomes these compatibility issues. Although the patent itself describes in general terms the ability to access user-specific resource and information from any computer, e.g., ’002 patent col. 3 l. 66-col. 4 l. 4, neither the specification nor the claims cabin the invention specifically in terms of solving these compatibility issues. Rather, the systems and methods recited merely relate to obtaining remote information by displaying a mobile interface at the local’ device and retrieving the user-specific resources and information using pointers. See, e.g., id. at col. 17 ll. 9-21. Without an explanation of the “mechanism” for “how the result is accomplished,” this purported feature of the invention cannot supply an inventive concept. Internet Patents, 790 F.3d at 1348; see also Elec. Power Grp., 830 F.3d at 1356 (noting that claims that are “so result-focused, so functional, as to effectively cover any solution to an identified problem” are frequently held ineligible under § 101). In short, the ’002 patent identifies a need, but the claims fail to provide a concrete solution to address that need.

Accordingly, these claims fail under step two as well and are thus ineligible under § 101.

Conclusion

For the foregoing reasons, we affirm the district court.

AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED-IN-PART

      . We note that there are certain instances where Federal Circuit law is intimately bound up in the contract interpretation issue. For example, we have held that "[t]he question of whether or not an agreement provides for automatic assignment is a matter of federal [patent] law.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1326 (Fed. Cir. 2010). "Although state law governs the interpretation of contracts generally ... the question of whether a patent assignment clause creates an automatic assignment or merely an obligation to assign is intimately bound up with the question of standing in patent cases. We have accordingly treated it as a matter of federal law.” Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010) (quoting DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008)); see Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed. Cir. 2000) (stating that while the ownership of patent rights is typically a question exclusively for state courts, the question of whether contractual language effects a present assignment of patent rights, or an agreement to assign rights in the future, is resolved by Federal Circuit law). As explained below, however, IV has not persuaded us that this case implicates such exceptions and indeed, admitted that California law governs the contract interpretation inquiry. Accordingly, we analyze the contract interpretation issue under California law.

      . Because we do not reach the issue of patent-eligibility of the ’581 patent, we did not include a summary of the technology of the patent in this opinion.

      . Even if we considered the extrinsic evidence, we agree with the district court that the evidence "speaks to Alsefe belief in its ownership” of the '581 patent and Alset's actions holding "itself out as the owner of the '581 patent after executing the Alset Agreement,” but it says nothing about "AllAd-vantage’s intent aside from its decision to do nothing to assert further ownership interest.” Intellectual Ventures I LLC v. Erie Indem. Co., 134 F.Supp.3d 877, 894 (W.D.Pa.2015). Indeed, some of the extrinsic evidence demonstrates that, when the other parties in the chain-of-title wanted to assign continuation applications like the application leading to the '581 patent, they knew how to do so. See id.

      . Because we do not subscribe to IV's interpretation of the assignment, i.e., assigning goodwill to the patent instrument itself, we express no opinion as to whether the assignment of goodwill of a patent itself would have been effective in transferring the rights to the parent’s unidentified child application.

      . We provide a more detailed summary of XML in our opinion in the companion appeal. Intellectual Ventures I LLC v. Capital One Financial Corp., Nos. 2016-1077, 850 F.3d 1332, 1338-39, 2017 WL 900031 (Fed. Cir. March 7, 2017).

      . Broadly speaking, in object-oriented programming, pointers are objects that point to a particular value stored in memory by referencing its memory address. In the context of the invention, a pointer includes a reference to a type of menu item that a system can access on a computer, handheld device, or a server. '002 patent col. 1 ll. 36-38.

        . Although we only address representative claim 40, we have reviewed the remaining claims and conclude nothing in addition to the elements recited in claim 40 transforms the abstract idea into patentable subject matter.