The Federal Circuit has revived a long-running dispute between Contour IP Holding, LLC and GoPro over action cameras, overturning a ruling that the asserted patents were ineligible under Alice. While the Northern District of California determined in 2022 that the claimed system for generating video at multiple quality levels depended only on generic camera components and was abstract, the appellate court countered in a September 9 precedential opinion that the lower court had characterized the patents at an “impermissibly high level of generality”. In the process, the Federal Circuit rejected the district court’s interpretation of a prior decision from 2021 that divided the appellate court over the proper bounds of Alice as applied to a physical device.

The litigation below kicked off in November 2014, when point-of-view (POV) camera maker Contour sued GoPro in the District of Utah over the provision of certain action cameras. In November and December 2015, the case was respectively dismissed and then refiled in Delaware, this time naming as coplaintiffs Contour’s IP-holding arm, Contour IP Holdings (“Contour IP”), and cameramaker iON Worldwide, with which Contour had merged in May 2015 (the new complaint stating that the shift of venue had occurred in part because Delaware was more convenient for iON). However, in July 2017, that court granted GoPro’s motion to transfer that case to the Northern District of California, a motion that cited the fact that the plaintiffs had dismissed iON because it no longer had standing after a reorganization of their patent rights left iON with just a nonexclusive license. In March 2021, Contour IP, this time named as the sole plaintiff, then filed another suit against GoPro in that same district, targeting a newer set of action cameras.

Asserted in each of those cases were two patents (8,890,954; 8,896,694) generally related to a portable POV sports camera. As the Federal Circuit would later find on appeal, this was a fairly new product category when the patents were filed, and products on the market at the time did not allow the user to preview their device’s video in order to adjust the recording angle or otherwise modify settings when the cameras were mounted in a desired location, such as a helmet. The ’954 and ’694 patents, per the court, solved this by allowing the camera to send real-time video to a remote device such as a mobile phone using a wireless connection, from which device the user could also adjust settings in real time. To permit real-time video playback, the claimed camera “generate[s]” video in two formats, a high-quality version that is recorded by the camera and a low-quality version that is streamed to the mobile device without exceeding the bandwidth constraints of the wireless connection. In July 2018, the district court construed the term “generate” to mean “record in parallel from the video image data” in the first lawsuit, as a result of which the court granted partial summary judgment of infringement of claim 11 of the ‘954 patent against GoPro in August 2020.

In June 2021, the defendant then filed a motion for judgment on the pleadings in the second suit, alleging that the asserted patents are unpatentably directed to the “abstract idea of a conventional camera processor used in its known and intended manner (i.e., in a camera)” and to the “abstract idea of viewing and recording a video” under Alice. That motion relied in significant part on Yu v. Apple, a precedential decision issued by a divided Federal Circuit earlier that month that also addressed “claims reciting components of a digital camera” (as summarized by the Federal Circuit in this case). In Yu, a panel majority affirmed the Alice invalidation of a digital camera patent, holding that the patent merely implemented the abstract idea of “taking two pictures . . . and using one picture to enhance the other in some way” using generic camera components that are undisputedly “well-known and conventional” and are used to “perform only their basic functions”. The majority also found that the claims did not reflect a technological improvement, rejecting the patent owner’s argument that the certain arrangement of lenses and image sensors described in the specification amounted to such an improvement. Circuit Judge Pauline Newman dissented, arguing that the majority’s decision improperly erodes the boundaries between patent eligibility and novelty/obviousness—and that the majority was wrong to apply Alice to what amounted to a mechanical invention.

District Judge William M. Orrick denied GoPro’s motion, holding that the procedural posture of this case precluded a decision on the pleadings alone—distinguishing those circumstances from Yu. While the district court in that case “made an explicit and uncontested finding that enhancing one image with another was well-known to photographers for a century”, Contour’s “well-pleaded allegations” here—describing the aforementioned “innovative solution” to problems faced by cameras then on the market—“prevent[ed] a finding in Contour’s favor”. However, the court denied the motion without prejudice to raised the issue again on an evidentiary record at summary judgment, a motion for which GoPro filed in December 2021.

This time GoPro succeeded, the court holding in March 2022 that representative claim 11 of the ‘954 patent was directed at the first step of Alice to the abstract idea of “creating and transmitting video (at two different resolutions) and adjusting the video’s settings remotely”. Judge Orrick found that Yu “teaches lessons pertinent to the facts here”, in particular highlighting the Federal Circuit’s holding that the claimed abstract idea was “carried out only with generic camera components”. Judge Orrick determined that “[h]ere, too, the claim recites only the vaguest version of each component—a (generic, unelaborated-on) lens, a (generic, unelaborated-on) processor, etc.—and only describes it as carrying out its basic functions without any technological innovation to them”.  As to the second step, the court ruled that the “claim recites only functional, ends-oriented language” with “no indication that the physical components are behaving in any way other than their basic, generic tasks’” (also citing Yu).

However, the Federal Circuit—ruling on appeal on September 9—disagreed, countering that Judge Orrick was wrong to find that the asserted patents are directed to an unpatentable abstract idea. Rather, the court determined that under Federal Circuit precedent, including its 2016 holding in McRO v. Bandai Namco Games America, representative “claim 11 is directed to a specific means that improves the relevant technology”. The Federal Circuit identified this “specific, technological means” as “parallel data stream recording with the low-quality recording wirelessly transferred to a remote device”, explaining that such means “provide a technological improvement to the real time viewing capabilities of a POV camera’s recordings on a remote device”. These means are sufficiently specific, the Federal Circuit further determined, under the court’s construction of “generate” as requiring parallel recording of multiple video streams, based on which the claim does not preclude “other ways” in which a “camera processor” might create multiple streams at varying quality levels, such as doing so in sequence.

Moreover, the Federal Circuit determined that “[t]he district court’s decision characterizes the claims at an impermissibly high level of generality”. The court explained that this is the same practice that it warned against in Enfish v. Microsoft (2016): “[D]escribing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule”. Judge Orrick’s “conclusion that the claims were ‘directed to a result or effect that itself is the abstract idea’ disregards the disclosed technological means for obtaining a technological result”, thereby “all but ensur[ing] the incorrect conclusion that the claims were drawn to an abstract idea”, the court held.

The Federal Circuit then proceeded to address GoPro’s various counterarguments, beginning with its contention that the challenged claims merely utilize “known or conventional components that existed in the prior art at the time of the invention”—holding that this on its own does not “necessarily” require an abstractness finding at Alice step one. Additionally, it rejected the defendant’s attempts to analogize the patents-in-suit to those found ineligible in other cases, in particular those invalidated in Yu: In that case, explained the Federal Circuit, the abstract idea identified by the court—“taking two pictures (which may be different at different exposures) and using one picture to enhance the other in some way”—was undisputedly a practice “known by photographers for over a century”. In contrast, the claimed “camera’s recording two video streams in parallel and wirelessly transferring the lower quality video stream to a remote device for real time viewing and adjustment” did not amount to such a “long-known or fundamental practice” that would justify a finding of ineligibility at step one.

The Federal Circuit also rejected GoPro’s attempt to analogize to its 2019 holding in ChargePoint v. SemaConnect, another case for which the district court had reached the opposite conclusion. In ChargePoint, the court invalidated claims related to networked electric charging stations as directed to “‘communication over a network,’ applied to the context of electric vehicle charging stations”, finding that the claims neither contained any technical improvements nor provided that the claimed charging station would “operate differently than it otherwise could”. In contrast, the Federal Circuit found here that the representative claim “describes more than wireless data transfer within a particular technological environment”. Rather, “by both recording multiple video streams in parallel and wirelessly transferring only one video stream, a lower quality stream, to a remote device”, the court found that the claim does indeed describe how the claimed camera would “operate differently than it otherwise could”, in implicit contrast with ChargePoint.

The court then summarized how the asserted patents survive the first step of Alice as follows:

The claims are directed to a technological solution to a technological problem. The written description discloses improving POV camera technology through specific means of generating high- and low-quality video streams in parallel and transferring a low-quality video stream to a remote device, and the claims reflect this improvement. The claims, therefore, recite patent eligible subject matter at Alice step one.

After determining that it was not necessary to proceed to step two, the Federal Circuit concluded by reversing and remanding for further proceedings.