Ordering Pizza is Not Patentable!

Some things are not patentable: laws of nature, natural phenomena, and abstract ideas.  The Supreme Court has long held that inventions falling within these categories are not patentable; they are patent-ineligible subject matter.  In 2014, the Supreme Court relied on this principle in deciding Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347.  In that case, the Court invalidated patent for a computerized system for mitigating risks in financial transactions. The Court also established a test for determining patent-eligible subject matter.  Since then, Alice has been used to invalidate many patents, particularly software patents.  Now it has been used to invalidate a patent for ordering pizza.

Ameranth owned four patents for “an information management system” for transmitting menus from a master database to handheld devices.  In 2011, Ameranth filed suit in the Southern District of California against several defendants, including Pizza Hut, Domino’s Pizza, and others, for infringement of the four patents.  The defendants challenged the validity of three of the patents in the Patent Trial and Appeal Board (PTAB).  The PTAB invalidated many of the claims of the three patents, and, in a subsequent appeal, the Federal Circuit invalidated the remaining claims.  All three patents were held invalid on the grounds that they were directed to patent-ineligible subject matter because the invention was an abstract idea.

The defendants challenged the fourth patent in the PTAB, but the PTAB denied the defendants’ petition, so the infringement litigation proceeded in the district court.

Pizza Hut filed a motion for summary judgement seeking a determination that the patent was invalid as an abstract idea.  However, Pizza Hut then settled the case against it, and Domino’s moved for summary judgement on the same grounds.

On September 27, 2018, the district court granted Domino’s motion and held the patent invalid.  The court applied the two-pronged Alice test.  As set forth in Alice, in the first prong, a court must determine whether the claims of the patent fall within one of the patent-ineligible categories (laws of nature, natural phenomena, and abstract ideas).  The court considers whether the patent’s claims are directed to a specific means or method (which would be patent-eligible) or are directed to a result and use generic processes and machines (which would not be patent-eligible).

If the claims fall within a patent-ineligible category, the court must then proceed to the second prong of the Alice test.  The court must determine whether the elements of the claim transform the claim from patent-ineligible subject matter into patent-eligible subject matter.

In applying the first prong of the Alice test, the court noted that the Federal Circuit had previously held that “collecting, analyzing and displaying information,” without more, and “fundamental economic practices…including longstanding commercial practices and methods of organizing human activity” are abstract ideas.  The court said that the Ameranth claims covered a system that configured the information on large paper menus into a wireless handheld device and allowed the master menu to communicate with the handheld devices in real-time.  The court held that the claims were directed to an abstract idea.

The court then went on to address the second prong of the Alice test.  The court considered the elements of the claims (software, hardware, real-time communications, and configuring information into a wireless device), and found that these elements were based on conventional technology and did not constitute an inventive concept.  The court held that none of these elements transformed the abstract idea of the invention into patent-eligible subject matter.  Therefore, the second prong of the test was met.  The court held the patent invalid as directed to an abstract idea.

Ameranth had filed similar suits against other businesses who use these types of ordering systems, including Papa Johns, Marriott Hotels, Starbucks, Apple and Ticketmaster, and the cases are about to go to trial. Now these cases will be dismissed, thanks to Domino’s. Meanwhile, Ameranth intends to appeal.