TQ Delta v. DISH Network — Court Upholds Phase-Scrambling Patent Under Section 101 but Invalidates Its Sibling Patent as Abstract

Background

TQ Delta, LLC sued DISH Network and related EchoStar companies in July 2015, accusing them of infringing patents on multicarrier communications. DISH and the other defendants moved for summary judgment that the asserted claims of two patents are invalid under 35 U.S.C. § 101, which limits patents to eligible subject matter and excludes abstract ideas: claims 1, 2, 7, 12, 13, 14, 15 and 20 of U.S. Patent No. 9,014,243 and claims 1, 6 and 9 of U.S. Patent No. 8,718,158.

Both patents share a specification about multicarrier modulation, such as discrete multitone, where data is sent on many carrier signals. According to the patents, if the phases of the modulated carriers are not random, the signal’s peak-to-average power ratio (PAR) can increase greatly, which can mean high power consumption or clipping of the transmitted signal. The patents propose to scramble the carriers’ phase characteristics to keep the PAR low. Claim 1 of the ‘243 patent recites a method in a multicarrier transceiver with a bit scrambler followed by a phase scrambler: scrambling input bits, scrambling carrier phases associated with the scrambled output bits, and transmitting at least one scrambled output bit on a first carrier and on a second carrier. Claim 1 of the ‘158 patent recites associating each carrier signal with a value from a pseudo-random number generator, determining a phase shift based on that value, and modulating a data bit on carriers, but does not require applying the computed phase shift to the carrier.

The Court’s Holding

Judge Gregory B. Williams granted the motion in part and denied it in part.

Representative claims. Defendants treated claim 1 of each patent as representative. Because TQ Delta did not present any argument that claim 1 is not representative of the other asserted claims, the court treated claim 1 of each patent as representative.

The ‘243 patent is not abstract (summary judgment denied). Defendants argued the claim is directed to the abstract idea of data conversion and is written in results-based functional language, drawing on a Federal Circuit case about video transmission (Hawk Technology). The court disagreed and found the claim analogous to claims the Federal Circuit has held eligible in Constellation Designs v. LG Electronics (2026) and Koninklijke KPN v. Gemalto (2019), which cover concrete implementations of technological improvements. Reading claim 1 as a whole, and in light of the court’s construction of “phase scrambler” as a “component operable to adjust the phases of the carrier signals, by pseudo-randomly varying amounts,” the claim describes how to lower PAR by pseudo-randomly scrambling the phases of carrier signals. Unlike the claims in Hawk Technology, it does not leave the claimed benefit out of the claim language; it is directed to a specific technological solution that improves the functionality of a multicarrier communications transceiver. The court therefore found the ‘243 claims not directed to an abstract idea and denied summary judgment as to that patent, without needing to reach step two.

The ‘158 patent is abstract and has no inventive concept (summary judgment granted). Defendants argued claim 1 covers only the preparatory steps of calculating a desired phase shift without claiming the step of actually applying it to the carrier phase. The court agreed. TQ Delta conceded that claim 1 does not require applying the phase shift to a carrier’s phase. Comparing the claim to Digitech Image Technologies v. Electronics for Imaging, where claims to generating and combining data into a device profile without claiming its use were abstract, the court held that claim 1 is directed to the abstract idea of calculating scrambled phases. TQ Delta’s authority for the point that a claim need not recite every element needed for practical use came from a case about the utility requirement, and the court found it unpersuasive. At step two, TQ Delta did not argue that any individual element supplies an inventive concept, and the benefit it relied on, reducing PAR, is missing from the claim language because applying the calculated phase shift is not required. Features that are not claimed are irrelevant to both steps of the Alice analysis, so the claim lacks an inventive concept. Because claim 1 was representative, all asserted claims of the ‘158 patent are invalid under § 101.

Key Takeaways

• Claims that actually recite the technical steps that achieve a stated technological improvement, such as scrambling both bits and carrier phases to reduce signal PAR, can be eligible at Alice step one.
• Claims that stop at calculating or determining a value without requiring that it be applied may be treated as abstract, even if the specification describes a concrete application.
• A patentee that does not respond to a representative-claim argument risks having the court decide eligibility for all asserted claims based on one claim.
• Benefits described only in the specification cannot supply an inventive concept at step two unless the claims capture them.

Why It Matters

The ruling shows how closely related patents with a shared specification can reach different outcomes under Alice depending on what the claims actually require. For companies facing infringement claims, it illustrates that eligibility challenges can succeed against claims written around a computation but not against claims tied to a concrete technical operation. For patent owners, it underscores the importance of drafting claims that require the step that produces the claimed benefit.

The decision comes in a case that has been pending since 2015 and addresses only the defendants’ first summary judgment motion on eligibility. The court did not decide infringement or other invalidity defenses.