that include “processors such as those sold by Intel and AMD”), 5:51-53 (“The HVAC units may
be conventional air conditioners”). Additionally, one of the patent inventors disavowed having
made any inventive contribution to such components, thereby confirming their conventional
nature. Ex. 4 at 126:13-22; 136:1-138:1.
By only reciting generic components performing conventional functions, the claims fail
to specify how any of claimed elements, such as the processor, programmable thermostat, or
HVAC system, actually achieve the desired results. Instead, the claims use only “generic
functional language to achieve the[] purported solutions.” Two-Way Media Ltd. v. Comcast
Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017). Here, “[n]othing in the claims . . .
requires anything other than conventional computer and network components operating
according to their ordinary functions,” and thus they fail to pass muster at Alice step two. Id.
See also In re TLI Commc’ns Patent Litig., 823 F.3d 607, 615 (Fed. Cir. 2016) (claims ineligible
where “the recited physical components behave exactly as expected according to their ordinary
use”).

B. All asserted claims of the ’327 patent are patent ineligible. 5
1. Alice Step One: the ’327 claims are directed to the abstract idea of
changing the thermostat setting in response to a request to reduce
energy usage.
The asserted claims of the ’327 patent recite functions that reflect nothing more than the
abstract idea of telling the thermostat to turn off the HVAC system in response to a request from
a utility to reduce energy usage. After removing extraneous verbiage,6 independent claim 1 of

5 As discussed above, the ’488 and ’327 patents share a specification and have many overlapping
claim elements. To the extent that the claim elements are overlapping, the arguments above with
respect to the ’488 patent are incorporated by reference here. Defendants will only separately
address in this section the ’327 claim elements that differ from those of the ’488 patent.
6 The first several limitations of ’327 claim 1 track those of ’488 claim 1. But then ’327 claim 1
proceeds to recite limitations relating to demand reduction request verification that diverge from