Opposition Brief — Universal Secure Registry LLC, Petitioner v. Apple Inc., et al.

No. 21-1056

IN THE

Supreme Court of the United States

UNIVERSAL SECURE REGISTRY LLC,

Petitioner,

v.

APPLE INC., VISA INC., VISA U.S.A. INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

RESPONDENTS’ JOINT BRIEF IN OPPOSITION

STEFFEN N. JOHNSON

MARK D. SELWYN

Counsel of record

WILSON, SONSINI,

GOODRICH & ROSATI, PC THOMAS G. SPRANKLING

LIV HERRIOT

1700 K Street NW

WILMER CUTLER PICKERING

Washington, DC 20006

HALE AND DORR LLP

2600 El Camino Real, Ste. 400

JAMES C. YOON

Palo Alto, CA 94306

WILSON, SONSINI,

GOODRICH & ROSATI, PC (650) 858-6000

mark.selwyn@wilmerhale.com

650 Page Mill Road

Palo Alto, CA 94304

Counsel for Apple Inc.

Counsel for Visa Inc. and

Visa U.S.A. Inc.

QUESTION PRESENTED

Whether patent claims that describe using generic

computer components to route personal financial information to a third-party intermediary so as to mitigate information security risks are unpatentable under

35 U.S.C. § 101 and Alice Corp. Pty. Ltd. v. CLS Bank

International, 573 U.S. 208 (2014).

(i)

CORPORATE DISCLOSURE STATEMENT

Apple Inc. has no parent company, and no publicly

held corporation owns 10% or more of its stock.

Visa Inc. has no parent corporation, and no publicly

held corporation owns 10% or more of its stock.

Visa U.S.A. Inc. is a wholly owned subsidiary of

Visa Inc.

(ii)

TABLE OF CONTENTS

Page

QUESTION PRESENTED ............................................... i

CORPORATE DISCLOSURE STATEMENT ............. ii

TABLE OF AUTHORITIES .......................................... iv

INTRODUCTION .............................................................. 1

STATEMENT ...................................................................... 5

A. The Patents ............................................................ 5

B. Proceedings Below ................................................ 8

REASONS FOR DENYING THE PETITION ............. 12

I.

THIS

COURT

HAS

REPEATEDLY

CONCLUDED

THAT

THE

FEDERAL

CIRCUIT’S APPLICATION OF THE ALICE

STANDARD DOES NOT MERIT REVIEW ................... 12

II. THIS CASE WOULD BE A PARTICULARLY

POOR VEHICLE TO RECONSIDER THE

SECTION 101 ANALYSIS ............................................. 13

A. The Patent Claims Are Strikingly

Close To Those At Issue In Alice ..................... 14

B. The Decision Below Involves A RunOf-The-Mill Application Of Law ....................... 15

C. USR’s Patent Claims Would Likely Be

Invalidated Even If The Section 101

Ruling Were Reversed ....................................... 20

III. THIS CASE IS FAR-REMOVED FROM—AND

SHOULD NOT BE HELD FOR—AMERICAN

AXLE............................................................................. 21

CONCLUSION ................................................................. 22

(iii)

iv

TABLE OF AUTHORITIES

CASES

Page(s)

Alice Corpration Party Ltd. v. CLS Bank

International, 573 U.S. 208 (2014) .................. passim

Ancora Technologies, Inc. v. HTC America,

Inc., 908 F.3d 1343 (Fed. Cir. 2018) ................... 10, 17

Bilski v. Kappos, 561 U.S. 593 (2010) ............................. 14

Boom! Payments, Inc. v. Stripe, Inc.,

839 F. App’x 528 (Fed. Cir. 2021)............................. 22

CLS Bank International v. Alice Corpration

Party Ltd., 717 F.3d 1269 (Fed. Cir. 2014) ............. 16

CosmoKey Solutions GmbH & Company KG v.

Duo Security LLC, 15 F.4th 1091

(Fed. Cir. 2021) ........................................................... 17

Electronic Communication Technologies, LLC

v. Shoperschoice.com, LLC,

958 F.3d 1178 (Fed. Cir. 2020) ...............................9-10

Enfish LLC v. Microsoft Corp., 822 F.3d 1327

(Fed. Cir. 2016) ........................................................... 16

Ericsson Inc. v. TCL Communication

Technology Holdings Ltd., 955 F.3d 1317

(Fed. Cir. 2020) ..................................................... 13, 17

Mayo Collaborative Services v. Prometheus

Laboratories, Inc., 566 U.S. 66 (2012) ....................... 2

Prism Technologies LLC v. T-Mobile USA,

Inc., 696 F. App’x 1014 (Fed. Cir. 2017).................. 10

Prism Technologies LLC v. T-Mobile USA,

Inc., 138 S. Ct. 689 (2018) .......................................... 12

v

TABLE OF AUTHORITIES—Continued

Page(s)

Secure Mail Solutions LLC v. Universal

Wilde, Inc., 873 F.3d 905 (Fed. Cir. 2017) ................. 9

Secured Mail Solutions LLC v. Universal

Wilde, Inc., 138 S. Ct. 2000 (2018) .......................12-13

Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161

(Fed. Cir. 2019) ........................................................... 10

Solutran, Inc. v. Elavon, Inc., 140 S. Ct. 2515

(2020) ............................................................................ 13

TecSec, Inc. v. Adobe Inc., 978 F.3d 1278

(Fed. Cir. 2020) ..................................................... 16, 17

United States v. Wells, 519 U.S. 482 (1997) ................... 18

DOCKETED CASES

American Axle & Manufacturing, Inc. v.

Neapco Holdings LLC, No. 20-891

(U.S.) .................................................................. 4, 21, 22

Apple Inc. v. Universal Secure Registry LLC,

Nos. 20-1222, 20-1234, 20-1330 (Fed. Cir.) .............. 20

Apple Inc. v. Universal Secure Registry LLC,

IPR2018-00067 (PTAB) ............................................. 20

Apple Inc. v. Universal Secure Registry LLC,

IPR2018-00809 (PTAB) ............................................. 20

Apple Inc. v. Universal Secure Registry LLC,

IPR2018-00813 (PTAB) ............................................. 20

Athena Diagnostics, Inc. v. Mayo

Collaborative Services, LLC, No. 19-430

(U.S.) ............................................................................ 13

vi

TABLE OF AUTHORITIES—Continued

Page(s)

Hikma Pharmaceuticals USA Inc. v. Vanda

Pharmaceuticals Inc., No. 18-817

(U.S.) ............................................................................ 13

HP Inc. v. Berkheimer, No. 18-415 (U.S.) ..................... 13

Visa Inc. v. Universal Secure Registry, LLC,

No. 20-1662 (Fed. Cir.)............................................... 20

Yu v. Apple Inc., No. 21-811 (U.S.) ................................. 12

STATUTORY PROVISIONS

35 U.S.C. § 101 ................................................................. 1, 8

OTHER AUTHORITIES

Ning, Sunnie, Note, Stabilizing Alice for

Abstract Ideas: A Case for Federal Circuit

to Turn to USPTO Guidance, 34 Harv. J.L.

& Tech. 3 (2021) .......................................................... 12

Perry, Mark A. & Jaysen S. Chung, Alice at

Six: Patent Eligibility Comes of Age,

20 Chi.-Kent J. Intell. Prop. 64 (2021) ..................... 12

IN THE

Supreme Court of the United States

No. 21-1056

UNIVERSAL SECURE REGISTRY LLC,

Petitioner,

v.

APPLE INC., VISA INC., VISA U.S.A. INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

INTRODUCTION

Eight years ago, this Court unanimously held that

a “computer-implemented scheme for mitigating … the

risk that only one party to a financial transaction will

pay what it owes … by using a third-party intermediary” describes a “patent-ineligible abstract idea” under

35 U.S.C. § 101. Alice Corp. Pty. Ltd. v. CLS Bank

Int’l, 573 U.S. 208, 212 (2014). Although Alice stated

that patent claims that “purport to improve the functioning of the computer itself” might survive Section

101 scrutiny, claims that “amount to ‘nothing significantly more’ than an instruction to apply [an] abstract

idea … using … generic computer” components do not.

Id. at 225-226.

Since Alice, this Court has denied dozens of petitions for certiorari asking this Court to clarify, modify,

2

or overturn the principles established in Alice and

Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), including in three of the

cases that the court below cited in support of its decision. But even apart from these repeated denials of

certiorari, this case would be an especially poor vehicle

to break from this Court’s practice of allowing Section

101 doctrine to develop in the lower courts. Universal

Secure Registry’s (“USR”) patent claims recite nothing

more than the type of abstract concept that this Court

and the Federal Circuit have long held patentineligible—regardless of the test applied.

Specifically, the patents describe the “secure verification of a person’s identity,” Pet. App. 40a, a basic

practice as old as banking and commerce itself. Financial institutions and payment systems have always

needed a way to confirm that the person seeking to access an account is entitled to do so—by using, for example, personal information like a birth date, signature,

or photo identification. The patent claims here do not

provide a technological advance over longstanding

practices that accomplish this end. Even the claim that

USR identifies as “illustrative” (Pet. 7) boils down to

“receiving a transaction request, verifying the identity

of a customer and merchant, [and] allowing a transaction”—sweeping language that provides no specific

technique or otherwise unconventional way of performing the claimed function. Pet. App. 12a.

As the unanimous panel below recognized, these

claims fall squarely under this Court’s ruling in Alice.

Just as Alice invalidated “a method of exchanging financial obligations between two parties using a thirdparty intermediary to mitigate … risk[s],” 573 U.S. at

219, this case “[s]imilarly” involves claims that “allow[]

a financial transaction between two parties using a

3

third-party intermediary to mitigate information security risks,” Pet. App. 14a. And as Alice confirms, using

generic computer components for “sending data to a

third party as opposed to the merchant” is simply rerouting information, not a patentable improvement to

computer security. Id.

USR contends that the Federal Circuit blurred the

lines between Alice’s first and second steps. In reality,

the court applied each step to each representative

claim, discussing at length both the relevant passages

of the specification and each claim, and carefully comparing them to claims analyzed in prior cases. Pet.

App. 9a-12a. Moreover, USR itself acknowledged below that “there is significant overlap between step one

and step two considerations,” and it repeatedly advanced the same basic points as arguments that could

“[a]lternatively” be adopted at either step. C.A. Opening Br. 26, 31, 40, 46, 51.

USR’s assertion that the decision below introduced

new and unfounded specificity, unconventionality, and

unexpected results requirements is equally untenable.

The Federal Circuit’s recognition that computerrelated inventions must claim specific asserted improvements in computer capabilities rather than an abstract process for which computers are merely invoked

as a tool flows logically from Alice’s holding that “the

mere recitation of a generic computer cannot transform

a patent-ineligible abstract idea into a patent-eligible

invention.” 573 U.S. at 223. The same is true of the

court’s passing references to “unconventionality” and

“unexpected results.” Indeed, USR repeatedly argued

below that the claims satisfied Section 101 precisely because they purport to “improve[] the functionality of

prior art conventional electronic transaction systems in

a specific and unconventional way.” USR C.A. Reply

4

Br. 5-6 (discussing the illustrative claim). The court of

appeals cannot be faulted for rejecting USR’s argument

using USR’s own terminology.

Moreover, even if this Court were to take up and

reverse the Section 101 ruling below, the underlying

patent claims would likely be invalidated on other

grounds. Although USR strongly implies (at 33) that

the asserted claims have survived all possible validity

challenges, many were invalidated by the Patent Office

and the handful that remain are the subject of Federal

Circuit appeals that have been stayed pending the resolution of this case.

The weakness of the asserted claims, coupled with

their similarity to the claims in Alice, confirms that this

case should not be held for American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 20-891.

American Axle involves wholly distinct claims—to a

concrete process for developing an improved automobile drive shaft—as well as distinct legal questions and

a controversial decision that evenly split the en banc

Federal Circuit and prompted five separate opinions

concerning whether to rehear the case en banc. The

panel decision below, in contrast, was unanimous and

did not even prompt a call for a response to USR’s en

banc petition, let alone a vote on en banc review.

In sum, the unanimous decision below applied Section 101 in a wholly uncontroversial manner that is in

line with the longstanding precedent of this Court and

the Federal Circuit. The petition for a writ of certiorari

should be denied.

5

STATEMENT

A. The Patents

1. USR’s four patents—U.S. Patent Nos.

8,856,539 (“’539 patent”), 8,577,813 (“’813 patent”),

9,100,826 (“’826 patent”), and 9,530,137 (“’137 patent”)—

have the same inventor and share large portions of

their specifications. As the court below explained, all

four patents “are directed to similar technology—

securing electronic payment transactions.” Pet. App.

2a-3a.

The patents all describe a generic database called a

“Universal Secure Registry,” which they characterize

as “a universal identification system … used to selectively provide information about a person to authorized

users.”1 The Universal Secure Registry database is designed to “take the place of multiple conventional forms

of identification,” and thus to minimize the incidence of

fraud in financial transactions.2

As the patents explain, the Universal Secure Registry database “may be any kind of database”3 and can

be implemented using “a general-purpose computer

system” using “a commercially available microprocessor” running “any … commercially available operating

1

C.A.J.A.80(3:65-4:10); C.A.J.A.138(4:8-11); C.A.J.A.193(3:5366); see also C.A.J.A.234 (3:5-9).

2

C.A.J.A.80(4:12-20); C.A.J.A.86(15:54-61, 16:44-51); C.A.J.A.

138(4:23-31); C.A.J.A.145(17:36-49, 18:27-34); C.A.J.A.193(4:10-18);

C.A.J.A.200(17:14-27, 18:4-12); C.A.J.A.234(3:22-30, 44-54); C.A.J.A.

238(11:21-34, 12:11-18).

3

C.A.J.A.83(10:24-26); C.A.J.A.142(12:1-3); C.A.J.A.197(11:5254); C.A.J.A.235(6:18-20).

6

system.”4 The types of information that can be stored

in the Universal Secure Registry are all also conventional: (1) algorithmically generated codes, such as a

time-varying multicharacter code, (2) “secret information,” such as a PIN or password, and/or (3) “biometric information”—an expansive term that includes

not only voiceprints, iris or facial scans, or DNA analysis, but also fingerprints, signatures, and photographs.5

The asserted patents also describe an “electronic

ID device,” which is “used generally to refer to any

type of electronic device that may be used to obtain access to the USR database.”6 In other words, as the

court below observed, this device “may be a smart card,

cell phone, pager, wristwatch, computer, personal digital assistant, key fob, or other commonly available electronic device.” Pet. App. 8a-9a.

2. USR acknowledges that claim 22 of the ’539 patent is “illustrative” of all other asserted claims. Pet. 7.

Briefly, claim 22 recites a method for providing information to a merchant to enable transactions between

the merchant and the purchaser where each purchas4

C.A.J.A.50(Fig. 1); C.A.J.A.83(10:1-16); C.A.J.A.109(Fig. 1);

C.A.J.A.142(11:45-59); C.A.J.A.164(Fig. 1); C.A.J.A.197(11:30-44);

C.A.J.A.219(Fig. 1); C.A.J.A.235(5:63-6:10); see also C.A.J.A.83

(9:35-38); C.A.J.A.142(12:34-36); C.A.J.A.197(12:18-20); C.A.J.A.235

(6:51-53).

5

C.A.J.A.52(Fig. 3); C.A.J.A.84(12:19-31); C.A.J.A.99(42:2936); C.A.J.A.111(Fig. 3); C.A.J.A.143(13:62-14:7); C.A.J.A.158

(44:54-61); C.A.J.A.166(Fig. 3); C.A.J.A.198(13:46-58); C.A.J.A.213

(43:52-59); C.A.J.A.221(Fig. 3); C.A.J.A.234(4:4-12); C.A.J.A.236

(8:10-54); see also C.A.J.A.92(27:43-47); C.A.J.A.151(29:39-44);

C.A.J.A.206(29:3-7).

6

35).

C.A.J.A.85(13:5-8); C.A.J.A.143(14:50-53); C.A.J.A.198(14:33-

7

er’s account data are stored in the Universal Secure

Registry and each purchase is identified by a timevarying multicharacter code. C.A.J.A.242; see also Pet.

App. 9a-10a. Notably, the sweeping functional language of claim 22 is not limited to any particular type of

device, and the ’539 patent admits that a time-varying

multicharacter code was already known prior to the invention. C.A.J.A.236(8:17-24).

Although claim 22 is wordy, it has just six basic

steps: (1) receiving a request from the merchant that

includes the purchaser’s time-varying code, (2) comparing the time-varying code with the time-varying code

stored in the Universal Secure Registry, (3) determining whether the merchant is in compliance with any access restrictions for that purchaser’s account, (4) if the

merchant is in compliance, accessing the relevant account identifying information regarding the purchaser’s

account, (5) providing that information (e.g., credit card

number) to a third party who will determine whether to

authorize the buyer’s purchase, and then (6) enabling or

denying the transaction without providing the account

identifying information to the merchant. C.A.J.A.

242(20:4-32).

Claim 10 of the ’826 patent adds the requirement

that the method be performed using a wireless-capable

“handheld device” and uses “biometric information”

(e.g., a signature or photo) rather than a time-varying

multicharacter code to identify the user’s account information. C.A.J.A.214; see also Pet. App. 21a (noting

that “Claim 10 is representative of the ’826 patent

claims”). The claim also requires “second authentication information,” i.e., some other piece of information

on the second device used to verify the user’s identity.

C.A.J.A.214.

8

Claim 12 of the ’137 patent is a system claim. It uses a “time varying value,” similar to the time-varying

multicharacter code of claim 22 of the ’539 patent.

C.A.J.A.159-160; see also Pet. App. 25a (“Claim 12 … is

representative of the ’137 patent claims”). Claim 12

adds the use of wireless transmission and a biometric

sensor and includes additional “secret information,”

such as a PIN or code, as part of the authentication

process. C.A.J.A.159-160.

Finally, claim 1 of the ’813 patent is an apparatus

claim for an “electronic ID device” and adds limitations

relating to a “user interface” and communication with a

generic Point of Sale terminal. C.A.J.A.104; see also

Pet. App. 15a-16a (“Claim 1 of the ’813 patent is representative” of the patent’s claims).

B. Proceedings Below

USR sued Apple and Visa, alleging they infringed

its four patents. Respondents moved to dismiss, contending the asserted patent claims were patentineligible under 35 U.S.C. § 101. Pet. App. 3a. The

magistrate judge initially recommended denying the

motion, explaining that she believed the claims were

directed to a non-abstract improvement in computer

functionality. Id. The district court rejected that recommendation and granted respondents’ motion to dismiss. Id. 3a-4a.

Addressing all asserted claims, the district court

held that “the patents are directed to an abstract

idea—the secure verification of a person’s identity.”

Pet. App. 40a.7 The court rejected the magistrate

7

USR’s assertion (at 11) that the district court provided “various[] characteriz[ations]” of the abstract idea is misleading. Although the district court used slightly different phrasing when

9

judge’s proposed finding that the asserted claims described an improvement in computer functionality. Id.

The court noted both that (1) USR had not raised that

argument in front of the magistrate judge and (2) “neither the patents nor their written descriptions disclose

‘concrete and useful improvements’ to ‘technical challenges associated with digital security and authentication.’” Id. Finally, the court analyzed each patent in

turn, explaining why each was directed to an abstract

idea and failed to state an inventive concept. Id. 40a47a.

The Federal Circuit unanimously affirmed. It began by summarizing the two-step test laid out in Alice.

Pet. App. 5a. “The first step,” the court stated, is “to

determine whether the claims at issue are directed to a

patent-ineligible concept, such as an abstract idea.” Id.

(citing Alice, 573 U.S. at 218). If so, “the second step of

the Alice test requires a court to … ‘determine whether

[the claim] contains an inventive concept sufficient to

transform the claimed abstract idea into a patenteligible application.’” Id. (quoting Alice, 573 U.S. at

221). The court then summarized the facts and holdings

of four Federal Circuit decisions involving similar technology, observing that each one had “turned on whether the claims” fell under the “improvement to computer

functionality” concept articulated in Alice. Pet. App.

5a-8a (citing Secure Mail Sols. LLC v. Universal Wilde,

Inc., 873 F.3d 905 (Fed. Cir. 2017); Electronic

Commc’ns Techs., LLC v. Shoperschoice.com, LLC, 958

discussing individual patents, it clearly stated that, at their root,

all claims were directed to “the secure verification of a person’s

identity.” Pet. App. 40a; see also id. 4a (panel stating that the district court “explained that the claimed invention [of the representative claims] was directed to the abstract idea of ‘the secure

verification of a person’s identity’”).

10

F.3d 1178 (Fed. Cir. 2020); Solutran, Inc. v. Elavon,

Inc., 931 F.3d 1161 (Fed. Cir. 2019); Prism Techs. LLC

v. T-Mobile USA, Inc., 696 F. App’x 1014 (Fed. Cir.

2017)).

“With this precedent in mind” (i.e., Alice and the

four similar Federal Circuit decisions), the court applied both steps of Alice to each representative claim.

For example, in analyzing illustrative claim 22 of the

’539 patent under Alice step 1, the court (1) spent several pages summarizing the relevant passages of the

specification and the claim, (2) compared the claim to

those invalidated in Prism Technologies and Solutran,

and (3) concluded that “like the claims at issue in

Prism, claim 22 is directed to an abstract idea.” See

Pet. App. 9a-12a.

The court also rejected USR’s argument that the

claim was not directed to an abstract idea because its

“recitation of a time-varying multicharacter code …

constitutes a specific technique that departs from earlier approaches to solve a computer problem.” Pet. App.

12a; cf. USR C.A. Reply Br. 14 (arguing that “‘improving security … can be a non-abstract computerfunctionality improvement if done by a specific technique that departs from earlier approaches to solve a

specific computer problem’”). As the court explained,

although prior Federal Circuit precedent had concluded

that an invention that “identified a specific technique

for addressing the vulnerability of license-authorization

software to hacking in an unexpected way” was not directed to an abstract idea, the claims here merely described the abstract idea of “a method for verifying the

identity of a user to facilitate an economic transaction,

for which computers are merely used in a conventional

way.” Pet. App. 12a-13a (citing Ancora Techs., Inc. v.

HTC Am., Inc., 908 F.3d 1343 (Fed. Cir. 2018)).

11

At Alice step 2, the court considered whether either of the two purported inventive concepts identified

by USR was sufficient to survive Section 101 scrutiny.

Pet. App. 13a-14a. The panel rejected USR’s argument

that “time-varying codes” constituted an inventive concept, explaining that “the patent itself acknowledges

that the claimed step of generating time-varying codes

for authentication of a user is conventional and longstanding.” Id. 13a. The court was similarly unpersuaded by USR’s assertion that “sending [financial] data to

a third-party as opposed to the merchant” was an inventive concept. Id. 13a-14a. As the panel explained,

Alice itself held both that “the use of a third-party intermediary in a financial transaction [is] an ineligible

abstract idea” and that “an abstract idea … cannot

serve as an inventive concept.” Id. 14a (citing Alice,

573 U.S. at 219-220, 223-224).

The court repeated this same mode of analysis for

the three remaining patents. For each patent, it:

•

summarized the relevant passages of the specification and representative claim, see Pet. App. 14a-16a

(’813 patent); id. 20a-22a (’826 patent); id. 24a-26a

(’137 patent);

•

considered whether the representative claim was

directed to an abstract idea under Federal Circuit

and this Court’s precedents, id. 17a-18a (’813 patent); id. 22a-23a (’826 patent); id. 26a-28a (’137 patent); and

•

considered whether the representative claim stated

an inventive concept that was distinct from that

abstract idea, id. 18a-20a (’813 patent); id. 23a-24a

(’826 patent); id. 29a-30a (’137 patent).

12

USR subsequently sought panel rehearing and rehearing en banc. The petition was denied without a single

Federal Circuit judge requesting a response to the petition or a formal vote on rehearing. Pet. App. 79a.

REASONS FOR DENYING THE PETITION

I.

THIS COURT HAS REPEATEDLY CONCLUDED THAT THE

FEDERAL CIRCUIT’S APPLICATION OF THE ALICE

STANDARD DOES NOT MERIT REVIEW

USR spends a half-dozen pages (at 26-32) arguing

that the proper interpretation of Section 101 presents

an “exceptionally important issue of patent law,” but

leaves out a crucial detail: This Court “has consistently

denied” every petition raising a Section 101 issue since

Alice issued in 2014. Perry & Chung, Alice at Six: Patent Eligibility Comes of Age, 20 Chi.-Kent J. Intell.

Prop., 64, 90 & App. A (2021). As of last spring, this

Court had “turned down over fifty petitions on Alice.”

Ning, Note, Stabilizing Alice for Abstract Ideas: A

Case for Federal Circuit to Turn to USPTO Guidance,

34 Harv. J.L. & Tech. 3 (2021) (emphasis added). Indeed, just five weeks ago, this Court declined to review

Yu v. Apple Inc., No. 21-811, which USR asserts applied “the same flawed analysis” as the decision below,

supposedly creating “similar confusion,” see Pet. 23 n.2,

26 n.3.

This Court’s long list of Section 101 denials includes

numerous cases that invalidated patents involving

technology comparable to the patents here. For example, this Court declined to review three of the decisions

involving “authentication technology” that the panel

cited in support of its ruling. See supra pp. 9-10; see also Prism Techs. LLC v. T-Mobile USA, Inc., 138 S. Ct.

689 (2018) (denying certiorari); Secured Mail Sols. LLC

13

v. Universal Wilde, Inc., 138 S. Ct. 2000 (2018) (same);

Solutran, Inc. v. Elavon, Inc., 140 S. Ct. 2515 (2020)

(same). Similarly, this Court recently denied certiorari

in a case involving a patent claim that “secur[ed] mobile

phones against improper access by apps.” See Ericsson

Inc. v. TCL Commc’n Tech. Holdings Ltd., 955 F.3d

1317, 1325, 1331 (Fed. Cir. 2020), cert. denied, 141 S. Ct.

2624 (2021).

USR notes that the Solicitor General has “bemoaned the current state of § 101 case law,” and that

this Court recently sought the Solicitor General’s guidance on whether to grant review in another case. Pet.

1, 3, 26-27, 37. But USR ignores that this Court has

previously declined to heed the Solicitor General’s advice. Just two years ago, this Court denied review in

two cases where it called for the views of the Solicitor

General (HP Inc. v. Berkheimer, No. 18-415, and

Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc., No. 18-817), and rejected a third petition

that the Solicitor General expressly urged it to grant

(Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, No. 19-430). The Solicitor General even

highlighted the same purported confusion in Section

101 law that USR cites, asserting that Athena had resulted in “multiple separate [Federal Circuit] opinions

articulating different understandings of [this Court’s

precedent]” and seeking this Court’s intervention. See

U.S. Br. 22-23, Hikma Pharmaceuticals; cf. Pet. 26-28.

The Court was apparently unpersuaded.

II. THIS CASE WOULD BE A PARTICULARLY POOR

VEHICLE TO RECONSIDER THE SECTION 101 ANALYSIS

In any event, USR is flat wrong that this case is

“an ideal vehicle to clarify” Alice. Pet. 32-36. For at

least three reasons, this case would be an abysmal

14

vehicle: (1) the patents here are so similar to the patent

in Alice that they would not survive Section 101 review

under any standard, (2) the panel’s ruling was a

straightforward application of law that does not raise

any novel issues, and (3) the underlying patents would

likely be invalidated on other grounds in any event.

A. The Patent Claims Are Strikingly Close To

Those At Issue In Alice

One reason that this case is an especially poor vehicle to “clarify” Alice is that the underlying patent

claims are so close to those at issue there that this

Court would likely invalidate them regardless of the

precise test applied.

This Court’s unanimous decision in Alice did not

“labor to delimit the precise contours” of the Section

101 analysis because its “prior cases, and Bilski [v.

Kappos, 561 U.S. 593 (2010)] in particular,” were sufficiently on point that additional analysis was unnecessary. 573 U.S. at 219, 221. Specifically, the case could

be resolved by “recogniz[ing] that there is no meaningful distinction between the concept of risk hedging in

Bilski and the concept of intermediated settlement” in

Alice. Id. at 221. Both concepts were “fundamental

economic practice[s] long prevalent in our system of

commerce” and “building block[s] of the modern economy.” Id. at 219-220. And since the Bilski claims did

not survive Section 101 review, neither could the claims

in Alice. Id. at 221.

The same basic principle governs here. As the

court below explained, the “illustrative” claim 22 of the

’539 patent (Pet. 7) is “[s]imilar” to the claims invalidated in Alice. Pet. App. 14a. Just as the claims in Alice

involved the “use of a third-party intermediary in a

15

financial transaction,” the claims here involve “sending

[financial] data to a third-party as opposed to the merchant.” Id. And just as the claims in Alice described

“‘a method of exchanging financial obligations between

two parties using a third-party intermediary to mitigate settlement risk,’” “the claims here involve allowing a financial transaction between two parties using a

third-party intermediary to mitigate information security risks.” Id. (quoting Alice, 573 U.S. at 219-220).

Here, as in Alice, USR’s patents claim “an abstract

idea” that “cannot serve as an inventive concept.” Id.

Indeed, that conclusion “follows from” not only Alice itself, but from this Court’s “prior cases.” Alice, 573

U.S. at 219. And since the invalidity of USR’s patents

is clear even apart from Alice, there would be little

point in granting review to consider the scope of that

decision (see Pet. i). In short, “there is no meaningful

distinction between” the claims in Alice and “prior cases” and the claims “here.” 573 U.S. at 219, 221.

B. The Decision Below Involves A Run-Of-TheMill Application Of Law

This case would also be a poor vehicle to consider

the outer bounds of Section 101 because, contrary to

USR’s assertions, the court below did not sua sponte

create three new tests (specificity, unconventionality,

unexpected results) and eliminate the distinction between Alice step 1 and step 2. See Pet. 16-26. Rather,

the court applied longstanding legal principles in a

manner consistent with this Court’s precedent and

USR’s own arguments below.

1. Specificity, Unconventionality, Unexpected

Results. In holding that patent claims that “simply recite [an abstract concept] as performed by a generic

16

computer” are invalid under Section 101, the Court in

Alice suggested that the analysis might be different if

the claims had “improve[d] the functioning of the computer itself.” 573 U.S. at 225. As the Federal Circuit

has long recognized, this inquiry “often turns on

whether the claims focus on specific asserted improvements in computer capabilities or instead on a process

or system that qualifies an abstract idea for which computers are invoked merely as a tool.” TecSec, Inc. v.

Adobe, Inc., 978 F.3d 1278, 1292-1294 (Fed. Cir. 2020)

(collecting cases; internal quotation marks omitted).

Contrary to USR’s repeated suggestion (e.g., Pet. 17),

this inquiry narrows rather than broadens Section 101’s

scope. Recognizing that Alice did not “broadly hold

that all improvements in computer-related technology

are inherently abstract,” the law “ask[s] whether the

claims are directed to an improvement in computer

functionality versus being directed to an abstract idea,

even at the first step of the Alice analysis.” Enfish

LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.

2016).

The Federal Circuit’s analysis flows logically from

Alice, which held that “the mere recitation of a generic

computer cannot transform a patent-ineligible abstract

idea into a patent-eligible invention.” 573 U.S. at 223.

Indeed, after noting that the claimed methods “simply

recite the concept of intermediated settlement as performed by a generic computer” rather than a means of

“improv[ing] the functioning of the computer itself,”

this Court quoted Judge Lourie’s concurrence in Alice,

which noted that “[t]here is no specific or limiting recitation of … improved computer technology.” Id. at 225

(quoting 717 F.3d 1269, 1285 (Fed. Cir. 2013) (Lourie,

J., concurring) (emphasis added)). In other words,

computer-related patents must do something more

17

than “[s]tating an abstract idea while adding the words

‘apply it with a computer.’” Id.

The court of appeals’ passing references to “unconventionality” and “unexpected results” go to the same

basic idea—that a computer-related patent claim cannot satisfy Section 101 if it merely implements a theoretical idea using generic computer components. For

example, the Federal Circuit has held patent claims ineligible under Section 101 where they “did not ‘claim a

new method of virus screening or improvements thereto,’ and merely claimed use of conventional virusscreening software to carry out the abstract virusscreening idea.” TecSec, 978 F.3d at 1294 (citing Ericsson, 955 F.3d at 1328) (emphasis added). On the other

hand, the Federal Circuit has held that Section 101 is

satisfied where a patent claim “specifically identifies

how” an improvement in computer functionality “is effectuated in an assertedly unexpected way”—e.g., using

the “modifiable part of the BIOS memory … to store …

information.” Ancora Techs., Inc. v. HTC Am., Inc.,

908 F.3d 1343, 1345-1348 (Fed. Cir. 2018) (emphasis

added).8

In any event, the court’s discussion of the “specificity” or “unconventionality” of the claims asserted here

could not have come as a surprise to USR. USR argued below that “illustrative” claim 22 of the ’539

8

USR and its amici half-heartedly suggest that the panel’s

decision “is difficult to reconcile” with CosmoKey Solutions GmbH

& Company KG v. Duo Security LLC, 15 F.4th 1091 (Fed. Cir.

2021). Pet. 36 n.12; see also Intertrust Br. 12-13; Michel Br. 10-11.

But CosmoKey expressly distinguished this case, explaining that

USR’s patents “were simply directed to combining … longstanding, well-known authentication techniques to achieve the expected result of increased security no greater than the sum of the

security provided by each technique alone.” 15 F.4th at 1096.

18

patent satisfied Section 101 precisely because it “improves the functionality of prior art conventional electronic transaction systems in a specific and unconventional way.” USR C.A. Reply Br. 5-6 (emphasis added); id. 13 (asserting the “specific and unconventional

technique … recited in claim 22”); accord USR C.A.

Opening Br. 22 (asserted claims “use[] specific, unconventional techniques”); id. at 23 (“even conventional

components can be patentable where combined in an

unconventional manner”). The Federal Circuit did not

err in framing its rejection of USR’s arguments using

USR’s own terminology. Even if the court had erred

(and it did not), this kind of “invited error” would weigh

against granting review. See United States v. Wells,

519 U.S. 482, 488-489 (1997).

2. Distinguishing Between Alice Step 1 and Alice Step 2. Although Alice did not need to “delimit the

precise contours of” the Section 101 analysis, it did reaffirm at least one clear limitation: An abstract idea

cannot be an inventive concept. 573 U.S. at 221, 225226; accord Pet. App. 14a. That is because, by definition, Alice step 2 is the “search for an inventive concept—i.e., an element that is sufficient to ensure that

the patent in practice amounts to significantly more

than a patent upon the ineligible concept itself.” 573

U.S. at 217-218 (emphasis added; quotation marks omitted).

This legal principle—which USR itself recites (at

14)—explains why the court of appeals’ step 2 analysis

occasionally incorporated or cross-referenced reasoning

from its step 1 analysis. For each claim, USR’s briefing

below repeatedly made the same basic arguments at

both steps. For example, USR argued that if its claims

were not directed to an improvement in computer functionality at step 1, that same purported improvement

19

could “[a]lternatively” be treated as an inventive concept. See, e.g., USR C.A. Opening Br. 31, 40, 46, 51; see

also id. 26 (arguing that “there is significant overlap

between step one and step two considerations”). Likewise, USR argued that illustrative claim 22 of the ’539

patent satisfied Section 101 because its “unconventional

use of time-varying multicharacter codes”—“[w]hether

analyzed under Alice step one or step two”—“renders

the claim patent-eligible.” Id. 34. USR made similar

arguments for each representative claim.9

In contrast, the court below directly addressed

USR’s step 2 arguments when they were distinct from

those raised at step 1. Again, using illustrative claim 22

of the ’539 patent as an example, the court expressly

rejected USR’s argument that the claim included an

inventive concept because it recited “(1) time-varying

codes and (2) sending data to a third-party as opposed

to the merchant.” Pet. App. 13a-14a; supra p. 11. USR

falsely suggests (at 25) that the court stated without

explanation that claim 22 failed Alice step 2 solely because the claim’s method is “conventional and

longstanding.” The court rejected only the timevarying code argument on that ground, and it did so because the “patent itself acknowledges that the claimed

9

See USR C.A. Opening Br. 40 (“Whether considered as part

of Alice step one or step two, th[e] improvements [described in

claim 12 of the ’137 patent] confirm that the claim satisfies Section

101.”); id. 46 (arguing that claim 1 of the ’813 patent “adds an inventive concept” because it “discloses technical improvements to

an electronic transaction system” “[a]s described above” in the

Alice step 1 analysis); see also USR C.A. Reply Br. 28-30 (arguing

that claim 10 of the ’826 patent is not directed to an abstract idea

because it claims “two separate user authentications” and that it

states an inventive concept because it “authenticates based on two

forms of information”).

20

step of generating time-varying codes for authentication of a user” was known in the prior art. Pet. App.

13a.

C. USR’s Patent Claims Would Likely Be

Invalidated Even If The Section 101 Ruling

Were Reversed

Finally, this case would make a poor vehicle to revisit Section 101 law because there is a high probability

that this Court’s ruling would make no difference to the

ultimate outcome. Most of USR’s asserted claims have

already been held unpatentable by the Patent Office in

a series of inter partes review (“IPR”) rulings that

USR did not appeal.10 As to the handful of claims that

the agency did not invalidate outright, Respondents

have appealed those decisions, and each of those appeals was fully briefed and argued in the Federal Circuit. Although the Federal Circuit concluded that

those appeals were moot in light of the decision finding

the claims patent-ineligible, it agreed to stay issuance

of the mandate pending disposition of this petition.11 If

USR were somehow to prevail on Section 101, those

appeals would spring back to life and in all likelihood

result in the claims being invalidated on other grounds.

10

See Apple Inc. v. Universal Secure Registry, LLC,

IPR2018-00809, Paper 51 (Oct. 8, 2019); Apple Inc. v. Universal

Secure Registry, LLC, IPR2018-00067, Paper 59 (May 28, 2019);

Apple Inc. v. Universal Secure Registry, LLC, IPR2018-00813,

Paper 46 (Oct. 8, 2019).

11

See, e.g., Apple Inc. v. Universal Secure Registry LLC,

Nos. 20-1222, 20-1234 (Fed. Cir.), ECF No. 62; Apple Inc. v. Universal Secure Registry, LLC, No. 20-1330 (Fed. Cir.), ECF No. 55;

Visa Inc. v. Universal Secure Registry, LLC, No. 20-1662, ECF

No. 60.

21

Remarkably, USR does not just ignore the existence of the parallel IPR proceedings. Instead, it actively disclaims them, asserting that the underlying patents “have survived multiple post-issue challenges to

their validity in the Patent Office.” Pet. 33. This assertion is at best misleading. Every agency decision upholding a patent claim in IPR was appealed, and—even

if USR were to prevail on patent-eligibility under Section 101—those appeals would still be highly likely to

invalidate the claims on other grounds. This case is accordingly a very poor vehicle for review.

III. THIS CASE IS FAR-REMOVED FROM—AND SHOULD

NOT BE HELD FOR—AMERICAN AXLE

In a final effort to avoid the denial of certiorari,

USR argues—without meaningful explanation—that

this Court should hold this case pending resolution of

American Axle. Pet. 37. But beyond the bare fact that

both cases cite Section 101, they could not be less alike.

Holding this case for the possibility of a grant and reversal in American Axle would only delay the inevitable.

First, the technology is drastically different.

American Axle involves a concrete process for developing an improved automobile drive shaft, American Axle Pet. i, 6-10, while this case—in USR’s own words—

involves the use of “computers, software, electronic

signal processing and communication networks,” Pet.

32.

Second, the questions presented are different.

American Axle asks this Court to review whether the

Federal Circuit applied the correct standard for determining whether an invention is directed to a natural

law, American Axle Pet. i, while USR’s petition (again,

22

in its own words) asks this Court to review whether

Section 101 requires considering “‘specificity,’ ‘unexpected results,’ and ‘unconventionality,’” Pet. i.

Finally, the decisions have (tellingly) drawn wholly

different reactions from the Federal Circuit. In American Axle, “the active judges of the Federal Circuit

were evenly divided, 6-6, on whether to grant rehearing en banc” and ultimately issued “five [separate]

opinions” setting out that “their fractured views.”

American Axle Pet. 15-17. Here, there was no dissent

whatsoever. The panel was unanimous, and not a single

Federal Circuit judge urged rehearing en banc—or

even called for a response to USR’s en banc petition.

See supra p. 12; see also Boom! Payments, Inc. v.

Stripe, Inc., 839 F. App’x 528, 532-533 (Fed. Cir. 2021)

(panel of three different Federal Circuit judges invalidating as “reminiscent of [the claims] at issue in Alice”

virtually identical claims that “’combine[d] the concept

of escrow—using a third party to hold payment until a

condition is satisfied—with the idea” of using a transaction-specific “identification code only known to the buyer and the third party”). That is for good reason: The

decision below was an entirely uncontroversial application of settled precedent, and “there is no meaningful

distinction between” the invention claimed here and the

inventions invalidated in Alice and “prior cases.” 573

U.S. at 219.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

23

Respectfully submitted.

STEFFEN N. JOHNSON

WILSON, SONSINI,

GOODRICH & ROSATI, PC

1700 K Street NW

Washington, DC 20006

JAMES C. YOON

WILSON, SONSINI,

GOODRICH & ROSATI, PC

650 Page Mill Road

Palo Alto, CA 94304

MARK D. SELWYN

Counsel of record

THOMAS G. SPRANKLING

LIV HERRIOT

WILMER CUTLER PICKERING

HALE AND DORR LLP

2600 El Camino Real, Ste. 400

Palo Alto, CA 94306

(650) 858-6000

mark.selwyn@wilmerhale.com

Counsel for Apple Inc.

Counsel for Visa Inc. and

Visa U.S.A. Inc.

APRIL 2022