STARK, U.S. District Judge:
Plaintiff Citrix Systems, Inc. ("Citrix") filed suit against Defendant Avi Networks, Inc. ("Avi") on December 21, 2017. (D.I. 1) Citrix alleges infringement of U.S. Patent Nos. 9,148,493 ("the '493 patent"), 8,631,120 ("the '120 patent"), 8,230,055 ("the '055 patent"), and 7,720,954 ("the '954 patent"). (D.I. 21) Citrix also asserts claims for false advertising and unfair competition under the Lanham Act, the Delaware Deceptive Trade Practices Act, and common law. (Id.) On June 6, 2018, Avi moved to partially dismiss the First Amended Complaint ("FAC") for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), contending that the asserted claims of the '055 and '954 patents are not directed to patent-eligible subject matter under 35 U.S.C. § 101. (D.I. 24) On October 26, 2018, the Court held a hearing regarding this motion and Avi's motion to transfer venue.
For the reasons stated below, the Court will grant Avi's motion to dismiss.
The asserted claims of the '055 and '954 patents allow one to identify whether a network service is available by determining whether the service's response time exceeds the service's average response time by a predefined amount.
The '055 patent is entitled "Method and Appliance for Using a Dynamic Response Time To Determine Responsiveness of Network Services." Claim 1 of the '055 patent recites:
The '954 patent is the parent of the '055 patent and shares with it a title and specification. Claim 1 of the '954 recites:
Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir. 2004). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (internal quotation marks omitted). Thus, the Court may grant such a motion to dismiss only if, after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." Maio v. Aetna, Inc., 221 F.3d 472, 481-82 (3d Cir. 2000) (internal quotation marks omitted).
A well-pleaded complaint must contain more than mere labels and conclusions. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plaintiff must plead facts sufficient to show that a claim has substantive plausibility. See Johnson v. City of Shelby, ___ U.S. ___, 135 S.Ct. 346, 347, 190
"To survive a motion to dismiss, a civil plaintiff must allege facts that `raise a right to relief above the speculative level on the assumption that the allegations in the complaint are true (even if doubtful in fact).'" Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element" of a plaintiff's claim. Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation marks omitted).
The Court is not obligated to accept as true "bald assertions," Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), "unsupported conclusions and unwarranted inferences," Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997), or allegations that are "self-evidentlyfalse," Nami v. Fauver, 82 F.3d 63, 69 (3d Cir. 1996).
Under 35 U.S.C. § 101, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." There are three exceptions to § 101's broad patent-eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980). "Whether a claim recites patent eligible subject matter is a question of law which may contain disputes over underlying facts." Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018).
In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012), the Supreme Court set out a two-step "framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014). First, courts must determine if the claims at issue are directed to a patent-ineligible concept ("step one"). See id. If so, the next step is to look for an "`inventive concept' — i.e., 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' ("step two"). Id. The two steps are "plainly related" and "involve overlapping scrutiny of the content of the claims." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir.2016).
At both steps 1 and 2, it is often useful for the Court to compare the claims at issue with claims that have been considered in the now considerably large body of decisions applying § 101. See Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016).
At step one, "the claims are considered in their entirety to ascertain whether their character
In conducting the step one analysis, courts should not "oversimplif[y]" key inventive concepts or "downplay" an invention's benefits. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1337-38 (Fed. Cir. 2016); see also McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016) ("[C]ourts `must be careful to avoid oversimplifying the claims' by looking at them generally and failing to account for the specific requirements of the claims.") (quoting In re TLI Commc'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016)).
If the claims are directed to a patent eligible concept at step one, the Court need not proceed to step two. Vanda Pharm. Inc. v. West-Ward Pharm. Int'l Ltd., 887 F.3d 1117, 1134 (Fed. Cir. 2018).
At step two, courts must look to both the claim "as a whole" and to 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." 1*tfcR O, 837 F.3d at 1312 (internal alterations and quotation marks omitted). The "standard" step two inquiry includes consideration of whether claim elements "simply recite `well-understood, routine, conventional activit[ies].'" Bascom Glob. Internet Servs., Inc. v. AT & T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016) (quoting Alice, 134 S.Ct. at 2359). "Simply appending conventional steps, specified at a high level of generality, [is] not
"Whether a particular technology is well-understood, routine, and conventional goes beyond what was simply known in the prior art. The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional." Berkheimer, 881 F.3d at 1369; see also Exergen Corp. v. Kaz USA, Inc., 725 F. App'x 959, 965 (Fed. Cir. 2018) ("Something is not well-understood, routine, and conventional merely because it is disclosed in a prior art reference. There are many obscure references that nonetheless qualify as prior art."). Moreover, "[t]he inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art." Bascom, 827 F.3d at 1350. For instance, in Bascom, the Federal Circuit held that "the limitations of the claims, taken individually, recite generic computer, network and Internet components, none of which is inventive by itself," but nevertheless determined that an
As part of the step two "inventive concept" inquiry, the Federal Circuit has looked to the claims as well as the specification. See Affinity Labs of Texas, LLC v. Amazon. corn Inc., 838 F.3d 1266, 1271 (Fed. Cir. 2016) ("Affinity Labs IF')
"The question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact. Any fact, such as this one, that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence." Berkheimer, 881 F.3d at 1368; see also Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1128 (Fed. Cir. 2018) ("While the ultimate determination of eligibility under § 101 is a question oflaw, like many legal questions, there can be subsidiary fact questions which must be resolved en route to the ultimate legal determination."); Automated Tracking Sols., LLC v. Coca-Cola Co., 723 F. App'x 989, 995 (Fed. Cir. 2018) ("We have held that `whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact.'") (quoting Berkheimer, 881 F.3d at 1368).
Finally, as a procedural matter, the Federal Circuit has observed that § 101 disputes may be amenable to resolution on motions for judgment on the pleadings, motions to dismiss, or summary judgment. Berkheimer, 881 F.3d at 1368 ("Patent eligibility has in many cases been
Applying these principles, the Federal Circuit has repeatedly affirmed early resolution of patent eligibility challenges. See, e.g., buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1351-52 (Fed. Cir. 2014) (affirming grant of Rule 12(c) motion for judgment on pleadings for lack of patentable subject matter); Intellectual Ventures I LLC v. Symantec Corp., 725 F. App'x 976, 978 (Fed. Cir. 2018) (affirming grant of summary judgment of patent ineligibility and stating Berkheimer "does not compel a different conclusion"); Maxon, LLC v. Funai Corp., Inc., 726 F. App'x 797, 798 (Fed. Cir. 2018) (affirming grant of motion to dismiss for lack of patentable subject matter); Voter Verified, Inc. v. Election Sys. & Software LLC, 887 F.3d 1376, 1379 (Fed. Cir. 2018), cert. denied, ___ U.S.
Avi contends that the asserted claims of the '055 patent and the '954 patent are invalid under 35 U.S.C. § 101. (D.I. 25)
For the reasons described below, the Court agrees and will grant Avi's motion to dismiss.
At step one of the Alice/Mayo test, the question is whether the asserted claims are directed to a patent-ineligible concept. "[A]ll inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Mayo, 132 S.Ct. at 1293. Thus, "an invention is not rendered ineligible for patent simply because it involves" a patent-ineligible concept. Alice, 134 S.Ct. at 2354. "At step one, therefore, it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is `directed to.'" Id.
The claims here are directed to the abstract idea of using a dynamic response time to determine availability. According to the patents, the claimed "dynamic" approach provides more accurate identification of service availability than the prior art, which determines availability using a static response time defined by an administrator, because the dynamic approach takes into account variations due to increased load or type of request. ('055 patent, 1:17-47) The FAC also frames the invention by contrast to the prior art static approach:
(D.I. 21 at
Citrix's argument that the claims pass Alice step one because they improve computer functionality is unpersuasive. A claim is patent-eligible under step one when the claims are "directed to an improvement to computer technology" rather than "directed to an abstract idea." Thales Visionix Inc. v. United States, 850 F.3d 1343, 1347 (Fed. Cir. 2017). Citrix contends that the claims "are necessarily directed to an improved accuracy of service availability identification in a computer network environment." (Id.) Citrix relies on the patents and the FAC, both of which describe technical advantages that result from the use of a dynamic response time instead of a static response time in the technological context of a computer network environment.
Even taking these contentions as true, the factual conclusion that practicing a claim improves computer functionality does not end the Alice step one inquiry. Rather, the Court must also consider the source of the improved computer functionality. A claim is not "directed to" an improvement in computer functionality if the technical benefits flow solely from performing an abstract idea in conjunction with well-understood structure. See BSG Tech, 899 F.3d at 1288. Here, Citrix does not contend that any of the technological elements recited by the claims, such as the "monitor" or "device intermediary," were anything but well-understood. (See D.I. 33 at 10-12) Instead, the purported technical benefits flow directly from the idea of using a dynamic — as opposed to a static — response time to determine availability. In virtually every context, technical and non-technical, an average of prior response times will be a better gauge of availability than a static threshold. (See, e.g., D.I. 25 at 11-12) (providing non-technical examples of using dynamic response time to determine availability) Contrary to Citrix's contention, then, the use of dynamic response times is not "necessarily rooted in computer networks." (D.I. 33 at 13-14) The technical context recited by the claims — service availability in a computer network — does not change the nature of this idea, and every technical advantage identified by Citrix ultimately stems from the same
The parties hotly contest whether BSG Tech is apposite to this case. (See generally D.I. 38, 46, 55) In BSG Tech, 899 F.3d at 1283-85, the Federal Circuit evaluated the patent-eligibility of claims directed to a "self-evolving generic index" that assisted users entering data into a database by providing the users with information from prior data entries. The Court found that the claims were directed to the abstract idea of "considering historical usage information while inputting data," id. at 1286, and that the claims lacked an inventive concept because the only allegedly unconventional feature of the claims was the abstract idea, id. at 1291. Avi contends that BSG Tech requires rejection of Citrix's argument that the claims are "directed to" a technical improvement in computer networks. (D.I. 38 at 1, 3-5) Citrix distinguishes the case, contending that its own claims solve technical problems with technical solutions, while arguing that the claims in BSG Tech were instead directed to "the very human activity of organizing information about various items based on their attributes." (D.I. 46 at 1-2) The Court agrees with Avi. Fundamentally, both this case and BSG Tech involve patents that apply an abstract idea in a technological context to obtain a purported technical benefit. In BSG Tech, the technological context was in "wide access databases," and the technical improvement was to "allow[] users to quickly and efficiently access hundreds of thousands or even millions of records, and still find only those few records that are relevant." 899 F.3d at 1286, 1288. Here, the technological context is computer networks, and the purported benefits arise from more accurate determination of whether a network service is available. Accordingly, here, as in BSG Tech, the claims are not directed to a technical improvement as the purported technical benefit flows solely from an abstract idea. That in BSG Tech the abstract idea was a method of organizing human activity, and here is a mathematical formula, is of no consequence.
As claim 1 of each of the asserted patents are directed to an abstract idea, the Court must proceed to step two of the analysis.
A claim directed to an abstract idea is nevertheless patent eligible if it captures an "inventive concept" beyond what was "well-understood, routine, and conventional" at the time of the invention. See Alice, 134 S.Ct. at 2359. This inventive concept ensures that "the patent in practice amounts to significantly more than a patent upon the [abstract idea] itself." Id. at 2355 (internal quotation marks omitted). It follows that "a claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention `significantly more' than that ineligible concept." BSG Tech, 899 F.3d at 1290.
Even taking as true Citrix's assertions regarding the novelty and benefits of using dynamic response times, the Court cannot find in the asserted patents an inventive concept. The only allegedly unconventional feature of the claims is the use of dynamic (as opposed to static) response time to determine availability. (D.I. 33 at 12-14, 17-20) But the Court has already determined this feature to be an abstract idea, and so this idea, no matter how beneficial when applied in a technical context, cannot provide an inventive concept. See BSG Tech, 899 F.3d at 1290; see
Citrix contends that the claims are inventive, in any event, because they solve "computer-centric problems with computer-centric solutions," and recite technical elements. (D.I. 33 at 12-14) But Citrix fails to provide any concrete or persuasive explanation of how determination of availability is "a problem specifically arising in the realm of `computer networks, or how the combination of technological elements recited in the claims is unconventional. Cf. DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) (holding claims on maintaining website look-and-feel patent-eligible because claims were "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks"); Thales v. United States, 850 F.3d 1343, 1349 (Fed. Cir. 2017) (holding claims on inertial sensors patent-eligible, despite claims involving use of laws of physics, because configuration of sensors was "unconventional"); Amdocs, 841 F.3d 1288 (Fed. Cir. 2016) (holding claims on collecting and processing of network usage information included inventive concept because "collection, filtering, aggregating, and completing steps all
('954 patent, 4:53-56, 8:6-12, 8:53-57) (emphasis added) Therefore, no factual disputes preclude granting Avi's motion to dismiss.
For these reasons, the Court finds that claim 1 of the '055 patent and claim 1 of the '954 patent are directed to patent-ineligible subject matter under Section 101.
Citrix argues that several of the dependent claims add features that render at least those claims patent eligible. (D.I. 33 at 14-16)
Several of the claims
Citrix also points to claims 5 and 6 of the '055 patent, which recite updating, by a device, "the average response time at predetermined intervals." Citrix contrasts these limitations with the prior art approach of using response times defined by a system administrator. (D.I. 33 at 16) However, this is simply performing an otherwise well-understood step with a conventional computer, a combination which does not confer patent eligibility. See Alice, 134 S.Ct. at 2358.
For the reasons stated above, the Court will grant Avi's motion to dismiss. The Court will grant the motion with prejudice because, based on the Court's analysis, any further amendment would be futile. The Court reaches this conclusion having considered Citrix's FAC (D.I. 21) (which, notably, was filed
An appropriate order follows.
At Wilmington this