McRO, Inc. v. Bandai Namco Games America Inc.

United States Court of Appeals

for the Federal Circuit

______________________

MCRO, INC., DBA PLANET BLUE,

Plaintiff-Appellant

v.

BANDAI NAMCO GAMES AMERICA INC.,

NAUGHTY DOG, INC., KONAMI DIGITAL

ENTERTAINMENT, INC., SEGA OF AMERICA,

INC., ELECTRONIC ARTS INC., OBSIDIAN

ENTERTAINMENT, INC., DISNEY INTERACTIVE

STUDIOS, INC., SQUARE ENIX, INC., NEVERSOFT

ENTERTAINMENT, INC., TREYARCH

CORPORATION, CAPCOM USA, INC., SONY

COMPUTER ENTERTAINMENT AMERICA LLC,

ATLUS U.S.A., INC., SUCKER PUNCH

PRODUCTIONS, LLC, INFINITY WARD, INC.,

LUCASARTS, A DIVISION OF LUCASFILM

ENTERTAINMENT COMPANY LTD. LLC, WARNER

BROS. INTERACTIVE ENTERTAINMENT, A

DIVISION OF WARNER BROS. HOME

ENTERTAINMENT INC., ACTIVISION

PUBLISHING, INC., BLIZZARD ENTERTAINMENT,

INC., VALVE CORPORATION, CODEMASTERS

USA GROUP, INC., CODEMASTERS SOFTWARE

INC., CODEMASTERS, INC., THE CODEMASTERS

SOFTWARE COMPANY LIMITED,

Defendants-Appellees

______________________

2015-1080, -1081, -1082, -1083, -1084, -1085, -1086, -1087,

-1088, -1089, -1090, -1092, -1093, -1094, -1095, -1096,

-1097, -1098, -1099, -1100, -1101

2 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

______________________

Appeals from the United States District Court for the

Central District of California in Nos. 2:12-cv-10322-GW-

FFM, 2:12-cv-10323-GW-FFM, 2:12-cv-10327-GW-FFM,

2:12-cv-10329-GW-FFM, 2:12-cv-10331-GW-FFM, 2:12-cv-

10333-GW-FFM, 2:12-cv-10335-GW-FFM, 2:12-cv-10337-

GW-FFM, 2:12-cv-10338-GW-FFM, 2:12-cv-10341-GW-

FFM, 2:12-cv-10342-GW-FFM, 8:13-cv-01870-GW-FFM,

2:14-cv-00332-GW-FFM, 2:14-cv-00336-GW-FFM, 2:14-cv-

00358-GW-FFM, 2:14-cv-00383-GW-FFM, 2:14-cv-00352-

GW-FFM, 2:14-cv-00417-GW-FFM, 8:13-cv-01874-GW-

FFM, 2:14-cv-00389-GW-FFM, 2:14-cv-00439-GW-FFM,

Judge George H. Wu.

______________________

Decided: September 13, 2016

______________________

JEFFREY A. LAMKEN, MoloLamken LLP, Washington,

DC, argued for plaintiff-appellant. Also represented by

MICHAEL GREGORY PATTILLO, JR.; JOHN FRANCIS

PETRSORIC, MARK STEWART RASKIN, ROBERT ALAN

WHITMAN, Mishcon de Reya New York LLP, New York,

NY; JOHN M. WHEALAN, Chevy Chase, MD.

SONAL NARESH MEHTA, Durie Tangri LLP, San Fran-

cisco, CA, representing defendants-appellees Electronic

Arts Inc., Capcom USA, Inc., Activision Publishing, Inc.,

Blizzard Entertainment, Inc., argued for all defendants-

appellees.

EDWARD R. REINES, Weil, Gotshal & Manges LLP,

Redwood Shores, CA, for defendants-appellees Bandai

Namco Games America Inc., Sega of America, Inc., Disney

Interactive Studios, Inc., Neversoft Entertainment, Inc.,

Treyarch Corporation, Atlus U.S.A., Inc., Infinity Ward,

Inc., LucasArts, a Division of LucasFilm Entertainment

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 3

Company Ltd. LLC, Warner Bros. Interactive Entertain-

ment, a Division of Warner Bros. Home Entertainment

Inc.

BASIL TRENT WEBB, Shook, Hardy & Bacon, LLP,

Kansas City, MO, for defendants-appellees Naughty Dog,

Inc., Sony Computer Entertainment America LLC, Sucker

Punch Productions, LLC. Also represented by JOHN D.

GARRETSON, BETH A. LARIGAN.

WENDY J. RAY, Morrison & Foerster LLP, Los Ange-

les, CA, for defendants-appellees Konami Digital Enter-

tainment, Inc., Square Enix, Inc. Also represented by

BENJAMIN J. FOX.

ANDREW DAVID TSU, Spach Capaldi & Waggaman

LLP, Newport Beach, CA, for defendant-appellee Obsidi-

an Entertainment, Inc. Also represented by THOMAS

WALLING.

JAN PATRICK WEIR, Michelman & Robinson, LLP, Ir-

vine, CA, for defendant-appellee Valve Corporation. Also

represented by JOSEPH JAMES MELLEMA; THEODORE J.

ANGELIS, DAVID T. MCDONALD, K&L Gates LLP, Seattle,

WA.

KEVIN W. KIRSCH, Baker & Hostetler LLP, Cincinnati,

OH, for defendants-appellees Codemasters, Inc., Code-

masters USA Group, Inc., Codemasters Software Inc., The

Codemasters Software Company Limited. Also represent-

ed by JARED A. BRANDYBERRY; BARRY EASTBURN

BRETSCHNEIDER, Washington, DC.

CHARLES DUAN, Public Knowledge, Washington, DC,

for amici curiae Public Knowledge, Electronic Frontier

Foundation. Also represented by VERA RANIERI, Electronic

Frontier Foundation, San Francisco, CA.

4 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

ANDREW JOHN PINCUS, Mayer Brown LLP, Washing-

ton, DC, for amicus curiae BSA I The Software Alliance.

Also represented by PAUL WHITFIELD HUGHES.

______________________

Before REYNA, TARANTO, and STOLL, Circuit Judges.

REYNA, Circuit Judge.

This appeal is from a grant of judgment on the plead-

ings under Fed. R. Civ. P. 12(c) that the asserted claims of

U.S. Patent Nos. 6,307,576 (‘‘the ’576 patent’’) and

6,611,278 (‘‘the ’278 patent’’) are invalid. The United

States District Court for the Central District of California

found that the asserted claims are directed to patent-

ineligible subject matter and are therefore invalid under

35 U.S.C. § 101 (“§ 101”). McRO, Inc. v. Sony Computer

Entm’t Am., LLC, 55 F. Supp. 3d 1214 (C.D. Cal. 2014)

(“Patentability Op.”). We hold that the ordered combina-

tion of claimed steps, using unconventional rules that

relate sub-sequences of phonemes, timings, and morph

weight sets, is not directed to an abstract idea and is

therefore patent-eligible subject matter under § 101.

Accordingly, we reverse.

I. BACKGROUND

A. Factual Background

The ’576 patent and the ’278 patent were both issued

to Maury Rosenfeld and are both titled “Method for Au-

tomatically Animating Lip Synchronization and Facial

Expression of Animated Characters.” The ’278 patent is a

continuation of the ’576 patent and shares the same

written description.

1. Admitted Prior Art

The patents relate to automating part of a preexisting

3-D animation method. As explained in the background

of the patents, the admitted prior art method uses multi-

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 5

ple 3-D models of a character’s face to depict various facial

expressions made during speech. See generally ’576

patent col. 1 l. 14 to col. 2 l. 37. To animate the character

as it speaks, the method morphs the character’s expres-

sion between the models. The “neutral model” is the 3-D

representation of the resting, neutral facial expression of

an animated character. The other models of the charac-

ter’s face are known as “morph targets,” and each one

represents that face as it pronounces a phoneme, i.e.,

makes a certain sound. This visual representation of the

character’s face making a sound is also called a “viseme.”

McRO Br. 7. An example morph target for the “ahh”

phoneme is shown below. Each of these morph targets

and the neutral model has identified points, called “verti-

ces,” in certain places on the face. The set of differences

in the location of these vertices (and the corresponding

point on the face) between the neutral model and the

morph target form a “delta set” of vectors representing

the change in location of the vertices between the two

models. For each morph target, there is a corresponding

delta set consisting of the vectors by which the vertices on

that morph target differ from the neutral model.

6 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

Defs.’ Br. 8. 1

Facial expressions are described as a function of the

amount each morph target, and its corresponding delta

set, is applied to modify the character model. “In produc-

ing animation products, a value usually from 0 to 1 is

assigned to each delta set by the animator and the value

is called the ‘morph weight.’” ’576 patent col. 1 ll. 63–65.

The set of morph weights for all the delta sets is called a

“morph weight set.” The neutral model is represented by

a morph weight set with all morph weights of 0. A de-

sired morph target is represented by the morph weight of

1 for that morph target’s delta set and a morph weight of

0 for all other delta sets.

The power of this prior art animation method is in

generating intermediate faces by using morph weights

between 0 and 1 to blend together multiple morph targets.

[Generally BB11–13, RB8–11] For example, the face

halfway between the neutral model and the “oh” face can

be expressed simply by setting the “oh” morph weight to

0.5, i.e., 50%, as shown below at the left. The model

halfway to the next syllable, in turn, could be expressed

by setting both the “oh” morph weight and that for the

next syllable each to 0.5, creating a blend of those two

delta sets. McRO Br. 11; see also Defs.’ Br. 8–11. For

each morph weight set, the resulting facial expression is

calculated by determining the displacement of each vertex

from the neutral model as the product of the morph

weights in the morph weight set and the corresponding

1 The images in this opinion are drawn from

McRO’s claim construction tutorial presented to the

district court, J.A. 3573, excerpts of which are used by

both parties to explain the prior art method. Defendants

dispute McRO’s depiction of the claimed method in that

tutorial and we do not rely on any of those depictions. See

Defs.’ Br. 46.

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 7

delta sets for the morph targets. ’576 patent col. 2 ll. 2–

15. 2

McRO Br. 11.

Animation of the character and lip synchronization

preexisting the invention was generally accomplished by

an animator with the assistance of a computer. Anima-

tors used “a ‘keyframe’ approach, where the artist set[]

the appropriate [morph] weights at certain important

times (‘keyframes’)” instead of at every frame. ’576 patent

col. 2 ll. 31–33. Animators knew what phoneme a charac-

ter pronounced at a given time from a “time aligned

phonetic transcription” (“timed transcript”). This listed

the “occurrence in time” of each phoneme the character

pronounced, as shown in the example below. Id. at col. 1

ll. 32–34.

2 |result| = |neutral| + ∑𝑛𝑛𝑥𝑥=1 |delta setx| ∗ morph weightx

8 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

McRO Br. 7.

Animators, using a computer, manually determined

the appropriate morph weight sets for each keyframe

based on the phoneme timings in the timed transcript.

“For each keyframe, the artist would look at the screen

and, relying on her judgment, manipulate the character

model until it looked right—a visual and subjective pro-

cess.” McRO Reply Br. 4 (emphasis removed); Defs.’

Br. 10 (“Using the [timed transcript], the animator would

decide what the animated face should look like at key

points in time between the start and end times, and then

‘draw’ the face at those times.”). Because the pronounced

phoneme and drawn keyframe corresponded in time, this

prior art process synchronized the lips and facial expres-

sion of the 3-D character. A computer program would

then interpolate between the keyframes set by the anima-

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 9

tor, creating the intermediate frames by determining the

appropriate morph weight sets at intermediate points in

time simply based on continuously transitioning between

the keyframes. ’576 patent col. 2 ll. 32–36.

2. Claimed Invention

The patents criticize the preexisting keyframe ap-

proach as “very tedious and time consuming, as well as

inaccurate due to the large number of keyframes neces-

sary to depict speech.” ’576 patent col. 2 ll. 35–37. They

suggest the

present invention overcomes many of the deficien-

cies of the prior art and obtains its objectives by

providing an integrated method embodied in com-

puter software for use with a computer for the

rapid, efficient lip synchronization and manipula-

tion of character facial expressions, thereby allow-

ing for rapid, creative, and expressive animation

products to be produced in a very cost effective

manner.

Id. at col. 2 ll. 38–44. “Accordingly, it is the primary

object of this invention to provide a method for automati-

cally . . . producing accurate and realistic lip synchroniza-

tion and facial expressions in animated characters.” Id.

at col. 2 ll. 45–50.

Essentially, the patents aim to automate a 3-D ani-

mator’s tasks, specifically, determining when to set

keyframes and setting those keyframes. This automation

is accomplished through rules that are applied to the

timed transcript to determine the morph weight outputs.

The patents describe many exemplary rule sets that go

beyond simply matching single phonemes from the timed

transcript with the appropriate morph target. Instead,

these rule sets aim to produce more realistic speech by

“tak[ing] into consideration the differences in mouth

10 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

positions for similar phonemes based on context.” Id. at

col. 10 ll. 6–7.

One exemplary set of rules provided and applied in

the specification of the ’576 patent is for a character

transitioning from silence through saying “hello.” See

’576 patent col. 7 l. 36 to col. 9 l. 22. This exemplary set of

rules provides for inserting a transition starting shortly

before the first syllable after a silence. Id. at col. 8 ll. 24–

28. The transition marks when the character begins to

transition from silence, shown by the closed-mouthed

neutral model, to the morph target for the first syllable,

with its open-mouthed shape. Id. at col. 8 ll. 61–63. That

is, the rule automates a character’s facial expressions so

the character will wait until shortly before it starts speak-

ing to begin opening its mouth. In terms of the prior art

method, the effect of this rule is to automatically create a

keyframe at a point that no phoneme is being pronounced.

Id. at col. 9 ll. 10–11. If instead no transition were placed

at that position, the resulting animation would have an

unrealistic quality. The character would open its mouth

gradually from the beginning of the sequence through its

first utterance as a result of the computer interpolating a

continuous transition between those two points. In the

prior art system, an animator would have to subjectively

identify the problematic sequence and manually fix it by

adding an appropriate keyframe. The invention, however,

uses rules to automatically set a keyframe at the correct

point to depict more realistic speech, achieving results

similar to those previously achieved manually by anima-

tors.

Claim 1 of the ’576 patent is representative and dis-

positive of the asserted claims 3 for the purposes of appeal:

3 McRO has asserted claims 1, 7–9, and 13 of the

’576 patent and claims 1–4, 6, 9, 13, and 15–17 of the ’278

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 11

A method for automatically animating lip syn-

chronization and facial expression of three-

dimensional characters comprising:

obtaining a first set of rules that define output

morph weight set stream as a function of phoneme

sequence and time of said phoneme sequence;

obtaining a timed data file of phonemes having a

plurality of sub-sequences;

generating an intermediate stream of output

morph weight sets and a plurality of transition

parameters between two adjacent morph weight

sets by evaluating said plurality of sub-sequences

against said first set of rules;

generating a final stream of output morph weight

sets at a desired frame rate from said intermedi-

ate stream of output morph weight sets and said

plurality of transition parameters; and

applying said final stream of output morph weight

sets to a sequence of animated characters to pro-

duce lip synchronization and facial expression

control of said animated characters.

’576 patent, cl. 1, col. 11 ll. 27–47.

patent. The district court focused its analysis on claim 1

of the ’576 patent as representative. It held that neither

the different text of the other independent claims nor the

added limitations of the dependent claims in either patent

affected the result regarding patentability. Patentability

Op., 55 F. Supp. 3d at 1228–29. The parties do not dis-

pute this conclusion or separately argue any other claims.

See McRO Br. 19; Defs.’ Br. 40 n.12. We agree and focus

our discussion on this claim.

12 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

B. Procedural History

In 2012 and 2013, Plaintiff-Appellant McRO, Inc.,

d/b/a Planet Blue (“McRO”) filed lawsuits in the U.S.

District Courts for the Central District of California and

for the District of Delaware. The defendants are general-

ly video game developers and publishers. On January 15,

2014, eight of the lawsuits originally filed in Delaware

were transferred to the Central District of California. The

five cases remaining in Delaware are not part of this

appeal, but are stayed pending the resolution of this

appeal. 4

The Central District of California (“district court”) con-

solidated the proceedings there for pre-trial purposes on

two tracks. 5 It held a claim construction hearing in the

4 McRO, Inc. v. Bethesda Softworks LLC, No. 12-cv-

1509 (D. Del.); McRO, Inc. v. Harmonix Music Sys. Inc.,

No. 12-cv-1510 (D. Del.); McRO, Inc. v. Rockstar Games,

Inc., No. 12-cv-1513 (D. Del.); McRO, Inc. v. Take-Two

Interactive Software, Inc., No. 12-cv-1517 (D. Del.); McRO,

Inc. v. 2K Games, Inc., No. 12-cv-1519 (D. Del.).

5 The Track 1 cases at the time the district court is-

sued its Judgment on Pleadings were: McRO, Inc. v.

Namco Bandai Games Am., Inc., CV-12-10322; McRO,

Inc. v. Konami Digital Entm’t, Inc., CV-12-10323; McRO,

Inc. v. Sega of Am., Inc., CV-12-10327; McRO, Inc. v. Elec.

Arts, Inc., CV-12-10329; McRO, Inc. v. Obsidian Entm’t,

Inc., CV-12-10331; McRO, Inc. v. Disney Interactive Stu-

dios, Inc., CV-12-10333; McRO, Inc. v. Naughty Dog, Inc.,

CV-12-10335; McRO, Inc. v. Capcom USA, Inc., CV-12-

10337; McRO, Inc. v. Square Enix, Inc., CV-12-10338;

McRO, Inc. v. Neversoft Entm’t, Inc., CV-12-10341; McRO,

Inc. v. Treyarch Corp., CV-12-10342; McRO, Inc. v. Atlus

U.S.A., et al., CV-13-1870; McRO, Inc. v. Sucker Punch

Prod.s, LLC, CV-14-0332; McRO, Inc. v. Activision Bliz-

zard, Inc., CV-14-0336; McRO, Inc. v. Infinity Ward, Inc.,

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 13

Track 1 cases on April 29, 2014, and issued its Rulings on

Claim Construction on May 1, 2014. J.A. 4009, 4155–73. 6

C. District Court’s § 101 Ruling

On July 10, 2014, all Central District of California de-

fendants from both tracks (“Defendants”) jointly filed a

motion for judgment on the pleadings that the asserted

claims were directed to patent ineligible subject matter

under § 101. Patentability Op., 55 F. Supp. 3d at 1216.

After a hearing, the district court granted the motion on

September 22, 2014, finding the asserted claims un-

patentable. Id. at 1230.

The district court’s analysis loosely tracks the two-

step framework laid out by the Supreme Court in Alice

Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014)

(“Alice”). First, the district court discussed the claims

generally: “Facially, these claims do not seem directed to

an abstract idea. They are tangible, each covering an

approach to automated three-dimensional computer

animation, which is a specific technological process.”

Patentability Op., 55 F. Supp. 3d at 1224. “At first blush,

it is therefore difficult to see how the claims might impli-

CV-14-0352; McRO, Inc. v. LucasArts Entm’t Co., CV-14-

358; McRO, Inc. v. Sony Comput. Entm’t Am., LLC, CV-

14-0383; McRO, Inc. v. Warner Bros. Interactive Entm’t

Inc., CV-14-0417.

The Track 2 cases were: McRO, Inc. v. Valve Corp.,

CV-13-1874; McRO, Inc. v. Codemasters USA Grp., Inc.,

CV-14-0389; McRO, Inc. v. Codemasters, Inc., CV-14-

0439. Patentability Op., 55 F. Supp. 3d at 1216 n.1.

6 The parties do not argue that any of the district

court’s constructions affect patent eligibility or contest the

constructions arrived at by the district court. The parties

raise two unrelated claim interpretation issues on appeal,

discussed below.

14 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

cate the basic underlying concern that these patents tie

up too much future use of any abstract idea they apply.”

Id. (quotation marks omitted).

Second, the district court attempted to “factor out

conventional activity” by comparing the claims to the

admitted prior art process that the patent sought to

improve. Id. at 1224. The court accepted as undisputed

that “a central part of the patents is ‘using morph weight

set representations of the facial shape coupled with

rules . . . to generate keyframes.’” Id. at 1226. The court

then looked to “whether the inclusion of that concept in

the claims satisfies § 101 given (1) the prior art, and

(2) the fact that the claims do not require any particular

rules.” Id.

After looking at each claim element in turn, the dis-

trict court concluded, “the claim adds to the prior art . . .

the use of rules, rather than artists, to set the morph

weights and transitions between phonemes.” Id. at 1227.

Nonetheless, the district court found the claims too broad-

ly preemptive to satisfy § 101. In the district court’s view,

because the claims were not limited to specific rules, 7 but

rather “purport to cover all such rules,” the claims merely

call for application of the abstract idea of using rules. Id.

at 1227 (citing Alice, 134 S. Ct. at 2358). The district

court found that, “while the patents do not preempt the

field of automatic lip synchronization for computer-

generated 3D animation, they do preempt the field of such

lip synchronization using a rules-based morph target

approach.” Id. at 1227. The court concluded that the

claims were unpatentable because “the novel portions of

[the] invention are claimed too broadly.” Id. at 1230.

7 The claim term is “first set of rules,” but we will

follow the shorthand adopted by the district court and

parties of referring to the “rules” or “claimed rules.”

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 15

The district court entered judgment against McRO on

October 31, 2014. J.A. 24–26. McRO appeals. We have

jurisdiction under 28 U.S.C. § 1295(a)(1).

II. PARTIES’ ARGUMENTS

The parties’ principal dispute is over the meaning and

application of two Supreme Court cases in light of Alice:

Parker v. Flook, 437 U.S. 584 (1978) (“Flook”) and Dia-

mond v. Diehr, 450 U.S. 175 (1981) (“Diehr”). Both cases

addressed the patentability of process claims that include

steps requiring calculation.

A. McRO’s Position

McRO argues that Diehr controls the outcome here

and dictates that the claims are not directed to an ab-

stract idea. [BB 34–40] Specifically, McRO argues that

the claims are not directed to an abstract idea because

they generate a tangible product, namely “a video of a 3-D

character speaking the recorded audio.” McRO Br. 38.

According to McRO, the claimed process is technological

because it provides “a method for getting a computer to

automatically generate video of a 3-D animated character

speaking in sync with pre-recorded dialogue—without

requiring an artist’s constant intermediation.” McRO

Br. 42.

McRO argues that even if we find the claims are di-

rected to an abstract idea, they are nonetheless patent

eligible because they “effect an improvement in [a] tech-

nology or technical field,” specifically 3-D computer gen-

erated lip-synchronization. McRO Br. 43 (quoting Alice,

134 S. Ct. at 2359 (citing Diehr, 450 U.S. at 177–78)).

This improvement, McRO argues, results from its method

that “employs specific types of rules” and uses those rules

in “a specific technological way.” McRO Br. 45 (emphasis

in original). The claimed type of rules are only those

“rules that define output morph weight set stream as a

function of phoneme sequence and time of said phoneme

16 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

sequence.” Id. at 46 (quoting ’576 patent, cl. 1, col. 11 ll.

30–32). When applied, in McRO’s interpretation, these

rules must “adjust for the fact that a phoneme may look

different when spoken depending on the phonemes pre-

ceding and/or following it.” McRO Br. 46.

These limitations are specific enough in McRO’s view

because the rules will necessarily vary by character as, for

example, “a swamp monster will use different rules than

a tight-lipped cat.” Id. at 46. McRO argues that its

claims cannot preempt the field because other techniques

exist that automate facial synchronization by capturing

actors’ facial motions and applying those motions to 3-D

animated characters. McRO Br. 50 (citing Barbara Rob-

ertson, Big Moves, Computer Graphics World (Nov. 2006),

available at http://www.cgw.com/Publications/CGW/2006/

Volume-29-Issue-11-Nov-2006-/Big-Moves.aspx). 8

B. Defendants’ Position

Defendants argue that Flook controls because the

claims are unpatentable algorithms that “can be per-

formed solely with pencil and paper.” Defs.’ Br. 28. The

claims, in Defendants’ view, “merely purport to take a

preexisting process and make it faster by automating it

on a general-purpose computer.” Defs.’ Br. 19. Defend-

ants argue that these claims fail even under Diehr be-

cause they do not result in any tangible product, instead

only producing a “stream of output morph weight sets”

that are applied “to produce lip synchronization” without

requiring the production of anything tangible like a video.

’576 patent, claim 1, col. 11 ll. 44–47; Defs.’ Br. 30. Even

8 Defendants do not dispute this is an alternative

method for automatic lip synchronization of 3-D animated

characters; instead, they argue that “this technology is

not remotely similar to the patented technology.” Defs.’

Br. 53.

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 17

if specific processing steps are required, Defendants argue

the claims remain directed to an abstract idea because

they only require using “mathematical algorithms to

manipulate existing information to generate additional

information.” Defs.’ Br. 34 (quoting Digitech Image

Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344,

1351 (Fed. Cir. 2014)).

Echoing the district court, Defendants fault the claims

for not specifically claiming particular rules, and instead

requiring that the user provide the rules. Defs.’ Br. 40–

42; see also Patentability Op., 55 F. Supp. 3d at 1227,

1230. Defendants dispute that the claimed rules depend

on the preceding or succeeding phonemes, i.e., sub-

sequences of phonemes, and fault McRO for failing to

raise this interpretation as a claim construction issue

before the district court. Defs.’ Br. 43–44. Defendants

claim broad preemption occurs because the rules only

reflect relationships “that any intelligible lip-

synchronization process must consider.” Id. at 50 (em-

phasis original). The relationships expressed by these

rules, Defendants argue, inevitably capture “a pre-

existing fundamental truth” about how a human mouth

looks while speaking certain sounds over time, preempt-

ing all possible rules-based methods. Alice, 134 S. Ct. at

2356; see Defs.’ Br. 16, 49–51. 9

III. STANDARD OF REVIEW

We review procedural aspects of the grant of judg-

ment on the pleadings under the law of the regional

circuit, in this case the Ninth Circuit. Allergan, Inc. v.

9 Amicus similarly argues that the claims are di-

rected to a natural phenomenon instead of an abstract

idea, specifically “the movement of the mouth to articu-

late sounds.” Amicus Public Knowledge Br. 11; see also

Defs.’ Br. 26.

18 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir.

2011). The Ninth Circuit reviews the grant or denial of

judgment on the pleadings under Rule 12(c) de novo.

Kotrous v. Goss-Jewett Co., 523 F.3d 924, 929 (9th Cir.

2008). We also review de novo whether a claim is invalid

under the judicially created exceptions to § 101. Ariosa

Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1375

(Fed. Cir. 2015).

IV. DISCUSSION

A. Claim Interpretation

As an initial matter, we note that, in this case, claim

construction is helpful to resolve the question of patenta-

bility under § 101. Specifically, the parties’ dispute about

whether the “first set of rules” must evaluate sequential

phonemes or can evaluate individual phonemes is re-

solved by the claim language. We agree with McRO that

the claims are limited to rules that evaluate sub-

sequences consisting of multiple sequential phonemes.

This limitation is apparent on the face of the claims. See

Phillips v. AWH Corp., 415 F.3d 1303, 1314 (Fed. Cir.

2005) (en banc). In particular, the intermediate morph

weight sets and transition parameters are generated “by

evaluating said plurality of sub-sequences against said

first set of rules.” ’576 patent, cl. 1, col. 11 ll. 36–39. 10

This limitation could not be satisfied by rules that only

evaluate individual phonemes. Instead, the claimed “first

set of rules” must be formulated to evaluate sub-

sequences of phonemes. 11

10 The limitation with the same effect in independ-

ent claim 1 of the ’278 patent is “applying said first set of

rules to each sub-sequence” at column 11 lines 53–54.

11 The parties also dispute whether the rules must

take into account the pacing of speech based on the “and

time of said phoneme sequence” limitation. Resolution of

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 19

B. Patentability Under § 101

Section 101 defines patent eligible subject matter as

“any new and useful process, machine, manufacture, or

composition of matter, or any new and useful improve-

ment thereof,” subject to the other limitations of the

Patent Act. Apart from the Patent Act, the courts have

created exceptions to the literal scope of § 101. “Laws of

nature, natural phenomena, and abstract ideas are not

patentable.” Alice, 134 S. Ct. at 2354 (quoting Ass’n for

Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct.

2107, 2116 (2013) (“Myriad”)). This appeal involves the

abstract idea exception.

In Alice, the Court applied a two-step framework for

analyzing whether claims are patent eligible. First, we

determine whether the claim at issue is “directed to” a

judicial exception, such as an abstract idea. Alice, 134 S.

Ct. at 2355. Mathematical formulas are a type of abstract

idea. Gottschalk v. Benson, 409 U.S. 63, 64 (1972) (“Ben-

son”). The abstract idea exception prevents patenting a

result where “it matters not by what process or machinery

the result is accomplished.” O’Reilly v. Morse, 56 U.S. 62,

113 (1854). We do not assume that such claims are di-

rected to patent ineligible subject matter because “all

inventions at some level embody, use, reflect, rest upon,

or apply laws of nature, natural phenomena, or abstract

ideas.” Mayo Collaborative Servs. v. Prometheus Labs.,

Inc., 132 S. Ct. 1289, 1293 (2012) (“Mayo”); see also In re

TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed.

Cir. 2016) (“TLI Commc’ns”). Instead, “the claims are

this question is neither necessary to resolve of the issues

on appeal nor indisputably resolved by the claim lan-

guage. We therefore decline to address this issue in the

first instance and express no opinion on whether McRO

has waived these arguments or is bound by them for

purposes of infringement.

20 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

considered in their entirety to ascertain whether their

character as a whole is directed to excluded subject mat-

ter.” Internet Patents Corp. v. Active Network, Inc., 790

F.3d 1343, 1346 (Fed. Cir. 2015). If the claims are not

directed to an abstract idea, the inquiry ends. If the

claims are “directed to” an abstract idea, then the inquiry

proceeds to the second step of the Alice framework.

In step two we consider whether the claims contain an

“inventive concept” sufficient to “transform the nature of

the claim into a patent-eligible application.” Alice, 134 S.

Ct. at 2355 (quotation omitted). To do so we look to both

the claim as a whole and the individual claim elements to

determine whether the claims contain “an element or

combination of elements that is ‘sufficient to ensure that

the patent in practice amounts to significantly more than

a patent upon the [ineligible concept] itself.’” Id. (quoting

Mayo, 132 S. Ct. at 1294) (alteration in original).

In Alice, the Court applied some of its § 101 jurispru-

dence that preceded the two-step framework, including

Flook and Diehr. In Flook, claims requiring the use of a

specific equation were unpatentable because they “simply

provide[d] a new and presumably better method of calcu-

lating alarm limit values.” Flook, 437 U.S. at 594–95.

The mathematical “formula itself was an abstract idea”

and “the computer implementation was purely conven-

tional” because “the ‘use of computers for “automatic

monitoring-alarming’” was ‘well known’.” Alice, 134 S. Ct.

at 2358 (quoting Flook, 437 U.S. at 594). “Flook stands

for the proposition that the prohibition against patenting

abstract ideas cannot be circumvented by attempting to

limit the use of [the idea] to a particular technological

environment.” Alice, 134 S. Ct. at 2358 (quoting Bilski v.

Kappos, 561 U.S. 593, 610–611 (2010) (“Bilski”)) (internal

quotation marks omitted).

The claims in Diehr, in contrast, were patentable.

The claims likewise “employed a ‘well-known’ mathemati-

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 21

cal equation.” Alice, 134 S. Ct. at 2358 (quoting Diehr,

450 U.S. at 177). A computer performed the calculations

as part of a broader process for curing rubber, but “the

process as a whole [did] not thereby become unpatentable

subject matter.” Diehr, 450 U.S. at 187. Instead, the

Court looked to how the claims “used that equation in a

process designed to solve a technological problem in

‘conventional industry practice.’” Alice, 134 S. Ct. at 2358

(quoting Diehr, 450 U.S. at 178). When looked at as a

whole, “the claims in Diehr were patent eligible because

they improved an existing technological process, not

because they were implemented on a computer.” Alice,

134 S. Ct. at 2358.

1. Specific Limitations

The district court determined that claim 1 of the ’567

patent is “drawn to the [abstract] idea of automated rules-

based use of morph targets and delta sets for lip-

synchronized three-dimensional animation.” Patentabil-

ity Op., 55 F. Supp. 3d at 1226. We disagree. We have

previously cautioned that courts “must be careful to avoid

oversimplifying the claims” by looking at them generally

and failing to account for the specific requirements of the

claims. TLI Commc’ns, 823 F.3d at 611; see also Diehr,

450 U.S. at 189 n.12. Here, the claims are limited to rules

with specific characteristics. As the district court recog-

nized during claim construction, “the claims themselves

set out meaningful requirements for the first set of rules:

they ‘define[] a morph weight set stream as a function of

phoneme sequence and times associated with said pho-

neme sequence.’” J.A. 4171 (Dist. Ct. Claim Construction

Op. 16) (quoting ’567 patent, cl. 1). They further require

“applying said first set of rules to each sub-sequence . . . of

timed phonemes.” Id. Whether at step one or step two of

the Alice test, in determining the patentability of a meth-

od, a court must look to the claims as an ordered combina-

tion, without ignoring the requirements of the individual

22 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

steps. The specific, claimed features of these rules allow

for the improvement realized by the invention.

As the specification confirms, the claimed improve-

ment here is allowing computers to produce “accurate and

realistic lip synchronization and facial expressions in

animated characters” that previously could only be pro-

duced by human animators. ’576 patent col. 2 ll. 49–50.

As the district court correctly recognized, this computer

automation is realized by improving the prior art through

“the use of rules, rather than artists, to set the morph

weights and transitions between phonemes.” Patentabil-

ity Op., 55 F. Supp. 3d at 1227. The rules are limiting in

that they define morph weight sets as a function of the

timing of phoneme sub-sequences. See, e.g., ’576 patent

col. 3 ll. 19–33. Defendants do not dispute that processes

that automate tasks that humans are capable of perform-

ing are patent eligible if properly claimed; instead, they

argue that the claims here are abstract because they do

not claim specific rules. 12 This argument echoes the

district court’s finding that the claims improperly purport

to cover all rules. Patentability Op., at 1227. The claimed

rules here, however, are limited to rules with certain

common characteristics, i.e., a genus.

Claims to the genus of an invention, rather than a

particular species, have long been acknowledged as pa-

tentable. E.g., Diamond v. Chakrabarty, 447 U.S. 303,

305 (1980) (patentable claim to “a bacterium from the

genus Pseudomonas containing therein at least two stable

12 See, e.g., Hearing Tr. at 14:00–15:09 (Defendants’

counsel acknowledging that a process for autopilot or

facial recognition using rules could be patented, but

arguing the claims here are unpatentable because they do

not claim specific rules), available at http://

oralarguments.cafc.uscourts.gov/default.aspx?fl=2015-

1080.mp3.

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 23

energy-generating plasmids, each of said plasmids provid-

ing a separate hydrocarbon degradative pathway.”).

Patent law has evolved to place additional requirements

on patentees seeking to claim a genus; however, these

limits have not been in relation to the abstract idea

exception to § 101. Rather they have principally been in

terms of whether the patentee has satisfied the tradeoff of

broad disclosure for broad claim scope implicit in 35

U.S.C. § 112. E.g., Carnegie Mellon Univ. v. Hoffmann-La

Roche Inc., 541 F.3d 1115, 1122 (Fed. Cir. 2008). It is

self-evident that genus claims create a greater risk of

preemption, thus implicating the primary concern driving

§ 101 jurisprudence, but this does not mean they are

unpatentable.

The preemption concern arises when the claims are

not directed to a specific invention and instead improperly

monopolize “the basic tools of scientific and technological

work.” Alice, 134 S. Ct. at 2354 (quoting Myriad, 133 S.

Ct. at 2116). The abstract idea exception has been ap-

plied to prevent patenting of claims that abstractly cover

results where “it matters not by what process or machin-

ery the result is accomplished.” Morse, 56 U.S. at 113; see

also Mayo, 132 S. Ct. at 1301. “A patent is not good for an

effect, or the result of a certain process” because such

patents “would prohibit all other persons from making the

same thing by any means whatsoever.” Le Roy v. Tat-

ham, 55 U.S. 156, 175 (1853). A patent may issue “for the

means or method of producing a certain result, or effect,

and not for the result or effect produced.” Diehr, 450 U.S.

175, 182 n.7. We therefore look to whether the claims in

these patents focus on a specific means or method that

improves the relevant technology or are instead directed

to a result or effect that itself is the abstract idea and

merely invoke generic processes and machinery. Enfish,

LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir.

2016) (“Enfish”); see also Rapid Litig. Mgmt. Ltd. v.

24 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

CellzDirect, Inc., No. 2015-1570, 2016 WL 3606624, at *4

(Fed. Cir. July 5, 2016).

2. Claims Directed To

Claim 1 of the ’576 patent is focused on a specific as-

serted improvement in computer animation, i.e., the

automatic use of rules of a particular type. We disagree

with Defendants’ arguments that the claims simply use a

computer as a tool to automate conventional activity.

While the rules are embodied in computer software that is

processed by general-purpose computers, Defendants

provided no evidence that the process previously used by

animators is the same as the process required by the

claims. See Defs.’ Br. 10–15, 39–40. In support, Defend-

ants point to the background section of the patents, but

that information makes no suggestion that animators

were previously employing the type of rules required by

claim 1. Defendants concede an animator’s process was

driven by subjective determinations rather than specific,

limited mathematical rules. The prior art “animator

would decide what the animated face should look like at

key points in time between the start and end times, and

then ‘draw’ the face at those times.” Defs.’ Br. 10. The

computer here is employed to perform a distinct process to

automate a task previously performed by humans. McRO

states that animators would initially set keyframes at the

point a phoneme was pronounced to represent the corre-

sponding morph target as a starting point for further fine

tuning. J.A. 3573 at 8:53 (McRO’s Claim Construction

Presentation). This activity, even if automated by rules,

would not be within the scope of the claims because it

does not evaluate sub-sequences, generate transition

parameters or apply transition parameters to create a

final morph weight set. It is the incorporation of the

claimed rules, not the use of the computer, that “improved

[the] existing technological process” by allowing the

automation of further tasks. Alice, 134 S. Ct. at 2358.

This is unlike Flook, Bilski, and Alice, where the claimed

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 25

computer-automated process and the prior method were

carried out in the same way. Flook, 437 U.S. at 585–86;

Bilski, 561 U.S. at 611; Alice, 134 S. Ct. at 2356.

Further, the automation goes beyond merely “organiz-

ing [existing] information into a new form” or carrying out

a fundamental economic practice. Digitech, 758 F.3d at

1351; see also Alice, 134 S. Ct. at 2356. The claimed

process uses a combined order of specific rules that ren-

ders information into a specific format that is then used

and applied to create desired results: a sequence of syn-

chronized, animated characters. While the result may not

be tangible, there is nothing that requires a method “be

tied to a machine or transform an article” to be patenta-

ble. Bilski, 561 U.S. at 603 (discussing 35 U.S.C.

§ 100(b)). The concern underlying the exceptions to § 101

is not tangibility, but preemption. Mayo, 132 S. Ct. at

1301.

The limitations in claim 1 prevent preemption of all

processes for achieving automated lip-synchronization of

3-D characters. McRO has demonstrated that motion

capture animation provides an alternative process for

automatically animating lip synchronization and facial

expressions. Even so, we have recognized that “the ab-

sence of complete preemption does not demonstrate

patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom,

Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). The narrower

concern here is whether the claimed genus of rules

preempts all techniques for automating 3-D animation

that rely on rules. Claim 1 requires that the rules be

rendered in a specific way: as a relationship between sub-

sequences of phonemes, timing, and the weight to which

each phoneme is expressed visually at a particular timing

(as represented by the morph weight set). The specific

structure of the claimed rules would prevent broad

preemption of all rules-based means of automating lip

26 MCRO, INC. v. BANDAI NAMCO GAMES AMERICA

synchronization, unless the limits of the rules themselves

are broad enough to cover all possible approaches. 13

There has been no showing that any rules-based lip-

synchronization process must use rules with the specifi-

cally claimed characteristics.

Defendants’ attorney’s argument that any rules-based

lip-synchronization process must use the claimed type of

rules has appeal, but no record evidence supports this

conclusion. Defendants again rely only on the patents’

description of one type of rules, but the description of one

set of rules does not mean that there exists only one set of

rules, and does not support the view that other possible

types of rules with different characteristics do not exist.

The only information cited to this court about the rela-

tionship between speech and face shape points to the

conclusion that there are many other possible approaches

to automating lip synchronization using rules. For exam-

ple, Amicus cites Kiyoshi Honda, Physiological Processes

of Speech Processing, in Springer Handbook of Speech

Production 7 (Jacob Benesty et al. eds., 2008) (“Honda”),

as support for the proposition that the claimed rules

reflect natural laws. Amicus Public Knowledge Br. 12.

Honda shows, however, that the interaction between

vocalization and facial expression is very complex, and

there are relationships present other than those required

by the claimed rules. Honda at 24 (“Physiological pro-

cesses during speech are multidimensional in nature as

described in this chapter.”). This complex interaction

permits development of alternative rules-based methods

of animating lip synchronization and facial expressions of

13 This is not a case where the patentee’s principal

contribution was in discovering relationships that existed

in nature, e.g., Myriad, 133 S. Ct. at 2112; animators were

previously able to naturally depict the relationship be-

tween speech, timing, and facial expression.

MCRO, INC. v. BANDAI NAMCO GAMES AMERICA 27

three-dimensional characters, such as simulating the

muscle action underlying characters’ facial expressions.

Under these circumstances, therefore, we need not as-

sume that future alternative discoveries are foreclosed.

Here, the structure of the limited rules reflects a spe-

cific implementation not demonstrated as that which “any

[animator] engaged in the search for [an automation

process] would likely have utilized.” Myriad, 133 S. Ct. at

2119–20 (quotation marks omitted). By incorporating the

specific features of the rules as claim limitations, claim 1

is limited to a specific process for automatically animating

characters using particular information and techniques

and does not preempt approaches that use rules of a

different structure or different techniques. See Morse, 56

U.S. at 113. When looked at as a whole, claim 1 is di-

rected to a patentable, technological improvement over

the existing, manual 3-D animation techniques. The

claim uses the limited rules in a process specifically

designed to achieve an improved technological result in

conventional industry practice. Alice, 134 S. Ct. at 2358

(citing Diehr, 450 U.S. at 177). Claim 1 of the ’576 patent,

therefore, is not directed to an abstract idea.

Because we find that claim 1 is not directed to ineligi-

ble subject matter, we do not reach Alice step two. Enfish,

822 F.3d at 1339.

V. CONCLUSION

Claim 1 is not directed to an abstract idea and recites

subject matter as a patentable process under § 101.

Accordingly, we reverse and hold that claims 1, 7–9, and

13 of the ’576 patent and claims 1–4, 6, 9, 13, and 15–17

of the ’278 patent are patentable under 35 U.S.C. § 101.

REVERSED AND REMANDED

COSTS

No costs.