UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

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1 Case: Document: 47-1 Page: 1 Filed: 08/15/2016 (1 of 9) UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT NOTICE OF ENTRY OF JUDGMENT ACCOMPANIED BY OPINION OPINION FILED AND JUDGMENT ENTERED: 08/15/2016 The attached opinion announcing the judgment of the court in your case was filed and judgment was entered on the date indicated above. The mandate will be issued in due course. Information is also provided about petitions for rehearing and suggestions for rehearing en banc. The questions and answers are those frequently asked and answered by the Clerk's Office. Costs are taxed against the appellant in favor of the appellee under Rule 39. The party entitled to costs is provided a bill of costs form and an instruction sheet with this notice. The parties are encouraged to stipulate to the costs. A bill of costs will be presumed correct in the absence of a timely filed objection. Costs are payable to the party awarded costs. If costs are awarded to the government, they should be paid to the Treasurer of the United States. Where costs are awarded against the government, payment should be made to the person(s) designated under the governing statutes, the court's orders, and the parties' written settlement agreements. In cases between private parties, payment should be made to counsel for the party awarded costs or, if the party is not represented by counsel, to the party pro se. Payment of costs should not be sent to the court. Costs should be paid promptly. If the court also imposed monetary sanctions, they are payable to the opposing party unless the court's opinion provides otherwise. Sanctions should be paid in the same way as costs. Regarding exhibits and visual aids: Your attention is directed Fed. R. App. P. 34(g) which states that the clerk may destroy or dispose of the exhibits if counsel does not reclaim them within a reasonable time after the clerk gives notice to remove them. (The clerk deems a reasonable time to be 15 days from the date the final mandate is issued.) FOR THE COURT /s/ Peter R. Marksteiner Peter R. Marksteiner Clerk of Court cc: TDE Petroleum Data Solutions v. AKM Enterprise, Inc. United States District Court for the Southern District of Texas, Case No. 4:15-cv-01821

2 Case: Document: 47-2 Page: 1 Filed: 08/15/2016 (2 of 9) NOTE: This disposition is nonprecedential. United States Court of Appeals for the Federal Circuit TDE PETROLEUM DATA SOLUTIONS, INC., Plaintiff-Appellant v. AKM ENTERPRISE, INC., DBA MOBLIZE, INC., Defendant-Appellee Appeal from the United States District Court for the Southern District of Texas in No. 4:15-cv-01821, Judge Gray H. Miller. Decided: August 15, 2016 MALCOLM EDWIN WHITTAKER, Whittaker Law Firm, Houston, TX, argued for plaintiff-appellant. PETER E. MIMS, Vinson & Elkins LLP, Houston, TX, argued for defendant-appellee. Also represented by JEFFREY TA-HWA HAN, Austin, TX. Before LOURIE, WALLACH, and HUGHES, Circuit Judges.

3 Case: Document: 47-2 Page: 2 Filed: 08/15/2016 (3 of 9) 2 TDE PETROLEUM DATA SOLUTIONS v. AKM ENTERPRISE, INC. HUGHES, Circuit Judge. TDE sued Moblize for infringement of a patent directed to processing sensor data on an oil well drill. The district court dismissed the suit on the pleadings, finding that the asserted claims are patent-ineligible under 35 U.S.C We agree and affirm the district court s judgment. I TDE and Moblize are competitors that provide services to oil drilling companies. TDE filed suit against Moblize in the United States District Court for the Southern District of Texas, alleging that Moblize infringes U.S. Patent 6,892,812. The 812 patent describes various processes for determining the state of an oil well drill. The disclosed processes start by receiving data from sensors deployed on the oil well, such as an RPM sensor that detects the number of revolutions per minute of the drill string (on which the drill bit is affixed), or a fluid pressure sensor that detects the pressure of drilling fluid in the stand pipe. See 812 patent, col After receiving this sensor data, the processes then validate the data, i.e., accept data that is within an expected range and discard data that is expected to be erroneous. See id. at col. 6 ll Finally, based on the valid sensor data, the processes determine what the present state of the oil well drill is, e.g., drilling, sliding, or bore hole conditioning. See id. at col. 6 l. 48 col. 7 l. 24. The 812 patent discloses several specific flowcharts that may be used in this last step to determine the state of the oil well drill. See id. at Figs. 3, 4, 5A, and 5B. The parties agree that claim 1 of the 812 patent is representative: 1. An automated method for determining the state of a well operation, comprising:

4 Case: Document: 47-2 Page: 3 Filed: 08/15/2016 (4 of 9) TDE PETROLEUM DATA SOLUTIONS v. AKM ENTERPRISE, INC. 3 storing a plurality of states for a well operation; receiving mechanical and hydraulic data reported for the well operation from a plurality of systems; and determining that at least some of the data is valid by comparing the at least some of the data to at least one limit, the at least one limit indicative of a threshold at which the at least some of the data do not accurately represent the mechanical or hydraulic condition purportedly represented by the at least some of the data; and when at least some of the data are valid, based on the mechanical and hydraulic data, automatically selecting one of the states as the state of the well operation. Moblize moved for dismissal of the suit under Federal Rule of Civil Procedure 12(b)(6), on the theory that the claims are patent-ineligible under 101. The district court granted the motion, finding that the claims are directed to the abstract idea of storing data, receiving data, and using mathematics or a computer to organize that data and generate additional information, J.A. 9, and that the claims fail to recite an inventive concept beyond that abstract idea. TDE appeals. We have jurisdiction under 28 U.S.C. 1295(a)(1). II This court reviews a district court s dismissal for failure to state a claim under the law of the regional circuit. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015). The Fifth Circuit reviews challenges to a dismissal for failure to state a claim under FRCP 12(b)(6) de novo, taking the allegations of the complaint to

5 Case: Document: 47-2 Page: 4 Filed: 08/15/2016 (5 of 9) 4 TDE PETROLEUM DATA SOLUTIONS v. AKM ENTERPRISE, INC. be true. See Scanlan v. Texas A&M Univ., 343 F.3d 533, 536 (5th Cir. 2003). This court reviews the district court s determination of patent eligibility under 101 de novo. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1255 (Fed. Cir. 2014). III A patent may be obtained for any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, 35 U.S.C. 101, but [l]aws of nature, natural phenomena, and abstract ideas are not patentable. Alice Corp. v. CLS Bank Int l, 134 S. Ct. 2347, 2354 (2014). The nowfamiliar Alice test instructs that a patent claim is ineligible under 101 if (1) the claim is directed to one of those patent-ineligible concepts (i.e., a law of nature, natural phenomena, or abstract idea) and (2) the claim elements, when considered both individually and as an ordered combination do not transform the nature of the claim into a patent-eligible application. Id. at 2355 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, (2012)). Turning to the first step of the Alice inquiry, we conclude that claim 1 is directed to an abstract idea. The steps of claim 1 recite operations performed by any general-purpose computer. As we recently reiterated in Electric Power Group, LLC v. Alstom S.A., No , 2016 WL , at *3 (Fed. Cir. Aug. 1, 2016), claims generally reciting collecting information, analyzing it, and displaying certain results of the collection and analysis are a familiar class of claims directed to a patentineligible concept. Claim 1 of the 812 patent recites all but the displaying step. Therefore, it is evident from our precedent that claim 1 is the sort of data gathering and processing claim that is directed to an abstract idea under step one of the Alice analysis. See, e.g., id.; OIP Techs., 788 F.3d at 1363; Digitech Image Techs., LLC v.

6 Case: Document: 47-2 Page: 5 Filed: 08/15/2016 (6 of 9) TDE PETROLEUM DATA SOLUTIONS v. AKM ENTERPRISE, INC. 5 Elecs. For Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). Turning to the second step of the Alice inquiry, we find nothing in claim 1 that adds anything more to the abstract idea of storing, gathering, and analyzing data. TDE does not and cannot argue that storing state values, receiving sensor data, validating sensor data, or determining a state based on sensor data is individually inventive. And none of TDE s arguments show that some inventive concept arises from the ordered combination of these steps, which, even if true, would be unpersuasive given that they are the most ordinary of steps in data analysis and are recited in the ordinary order. While the specification arguably provides specific embodiments for the step of automatically selecting one of the states as the state of the well operation, claim 1 recites none of those details. Instead, claim 1 simply recites generic computer functions that amount to nothing more than the goal of determining the state of an oil well operation. As we discussed at greater length in Electric Power, the claims of the 812 patent recite the what of the invention, but none of the how that is necessary to turn the abstract idea into a patent-eligible application. See Electric Power, 2016 WL , at *4 5. Therefore, we find that claim 1 is patent-ineligible under Although TDE asserted the other 114 claims contained in the 812 patent, it made no attempt in either its briefs or at oral argument to distinguish those claims from representative claim 1, other than to state that the systems (reciting generic hardware) are different from the methods. See Oral Argument at 5:00 6:40 (July 5, 2016), available at default.aspx?fl= mp3. Those arguments are insufficient to demonstrate eligibility under 101.

7 Case: Document: 47-2 Page: 6 Filed: 08/15/2016 (7 of 9) 6 TDE PETROLEUM DATA SOLUTIONS v. AKM ENTERPRISE, INC. IV For these reasons, we affirm the district court s judgment finding claims patent-ineligible under 101. AFFIRMED

8 Case: Document: 47-3 Page: 1 Filed: 08/15/2016 (8 of 9) UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT Questions and Answers Petitions for Rehearing (Fed. Cir. R. 40) and Petitions for Hearing or Rehearing En Banc (Fed. Cir. R. 35) Q. When is a petition for rehearing appropriate? A. Petitions for rehearing are rarely considered meritorious. Consequently, it is easiest to first answer when a petition for rehearing is not appropriate. A petition for rehearing should not be used to reargue issues already briefed and orally argued. If a party failed to persuade the court on an issue in the first instance, they do not get a second chance. This is especially so when the court has entered a judgment of affirmance without opinion under Fed. Cir. R. 36, as a disposition of this nature is used only when the appellant has utterly failed to raise any issues in the appeal that require an opinion to be written in support of the court s judgment of affirmance. Thus, as a usual prerequisite, the court must have filed an opinion in support of its judgment for a petition for rehearing to be appropriate. Counsel seeking rehearing must be able to identify in the court s opinion a material error of fact or law, the correction of which would require a different judgment on appeal. Q. When is a petition for hearing or rehearing en banc appropriate? A. En banc decisions are extraordinary occurrences. To properly answer the question, one must first understand the responsibility of a three-judge merits panel of the court. The panel is charged with deciding individual appeals according to the law of the circuit as established in the court s precedential opinions. While each merits panel is empowered to enter precedential opinions, the ultimate duty of the court en banc is to set forth the law of the Federal Circuit, which merit panels are obliged to follow. Thus, as a usual prerequisite, a merits panel of the court must have entered a precedential opinion in support of its judgment for a suggestion for rehearing en banc to be appropriate. In addition, the party seeking rehearing en banc must show that either the merits panel has failed to follow identifiable decisions of the U.S. Supreme Court or Federal Circuit precedential opinions or that the merits panel has followed circuit precedent, which the party seeks to have overruled by the court en banc. Q. How frequently are petitions for rehearing granted by merits panels or petitions for rehearing en banc accepted by the court? A. The data regarding petitions for rehearing since 1982 shows that merits panels granted some relief in only three percent of the more than 1900 petitions filed. The relief granted usually involved only minor corrections of factual misstatements, rarely resulting in a change of outcome in the decision. En banc petitions were accepted less frequently, in only 16 of more than 1100 requests. Historically, the court itself initiated en banc review in more than half (21 of 37) of the very few appeals decided en banc since This sua sponte, en banc review is a by-product of the court s practice of circulating every precedential panel decision to all the judges of the Federal Circuit before it is published. No count is kept of sua sponte, en banc polls that fail to carry enough judges, but one of the reasons that virtually all of the more than 1100 petitions made by the parties since 1982 have been declined is that the court itself has already implicitly approved the precedential opinions before they are filed by the merits panel. Q. Is it necessary to have filed either of these petitions before filing a petition for certiorari in the U.S. Supreme Court? A. No. All that is needed is a final judgment of the Court of Appeals. As a matter of interest, very few petitions for certiorari from Federal Circuit decisions are granted. Since 1982, the U.S. Supreme Court has granted certiorari in only 31 appeals heard in the Federal Circuit. Almost 1000 petitions for certiorari have been filed in that period. July 21, 2008

9 Case: Document: 47-4 Page: 1 Filed: 08/15/2016 (9 of 9) UNITED STATES COURT O}' APPEALS FOR THE FEDERAL CIRCUIT INFORMATION SHEET FILING A PETITION FOR A WRIT OF CERTIORARI There is no automatic right of appeal to the Supreme Court ofthe United States from judgments ofthe Federal Circuit. You must file a petition for a writ of certiorari which the Supreme Court will grant only when there are compelling reasons. (See Rule 10 of the Rules of the Supreme Court ofthe United States, hereinafter called Rules.) Time. The petition must be filed in the Supreme Court ofthe United States within 90 days of the entry ofjudgment in this Court or within 90 days ofthe denial ofa timely petition for rehearing. The judgment is entered on the day the Federal Circuit issues a final decision in your case. [The time does not run from the issuance ofthe mandate, which has no effect on the right to petition.] (See Rule 13 ofthe Rules.) Fees. Either the $300 docketing fee or a motion for leave to proceed in forma pauperis with an affidavit in support thereof must accompany the petition. (See Rules 38 and 39.) Authorized Filer. The petition must be filed by a member ofthe bar ofthe Supreme Court of the United States or by the petitioner representing himself or herself. Format of a Petition. The Rules are very specific about the order ofthe required information and should be consulted before you start drafting your petition. (See Rule 14.) Rules 33 and 34 should be consulted regarding type size and font, paper size, paper weight, margins, page limits, cover, etc. Number of Copies. Forty copies of a petition must be filed unless the petitioner is proceeding in forma pauperis, in which case an original and ten copies ofthe petition for writ ofcertiorari and of the motion for leave to proceed in forma pauperis. (See Rule 12.) Where to File. You must file your documents at the Supreme Court. Clerk Supreme Court of the United States 1 First Street, NE Washington, DC (202) No documents are filed at the Federal Circuit and the Federal Circuit provides no information to the Supreme Court unless the Supreme Court asks for the information. Access to the Rules. The current rules can be found in Title 28 ofthe United States Code Annotated and other legal publications available in many public libraries. Revised December 16, 1999