ROBERT W. SCHROEDER, III, District Judge.
Before the Court are Defendants' Objections
Defendant Ally objects to the Magistrate Judge's conclusion that claim construction and attendant subsidiary fact finding are necessary to determine whether the claims are drawn to ineligible subject matter under § 101. Case No. 2:15-cv-1787, Docket No. 28 at 2-3. Ally argues that "no reasonable construction could salvage patentability," id. at 3, and that, in any event, CryptoPeak failed to propose any claim constructions. Id. at 4. Ally states that the claims are not drawn to improving an existing technological process or the functioning of a computer. Id. at 3 (citing Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016)). CryptoPeak argues that "[t]he invention of the '150 Patent provides significant advantages over the prior art" and provides a "solution [that] is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." Case No. 2:15-cv-1787, Docket No. 19 at 27 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014)).
The Court agrees with the Magistrate Judge that the subject-matter eligibility of the Asserted Claims is not determinable at the pleading stage of this case. See R&R at 13. In this case, claim construction is likely to assist in both steps of the subject-matter eligibility analysis under Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347 (2014). Moreover, further factual development will assist the Court in making the factual determinations that underlie the § 101 inquiry such as whether the claimed algorithms and calculations "can be performed mentally, or readily with pencil and paper." See R&R at 12 (quoting TPQ Dev't, LLC v. Intuit Inc., Case No. 2:12-cv-180, Dkt. No. 150 at 9-10 (E.D. Tex. Feb. 19, 2014) (Bryson, J.)). The Court finds no error in the Magistrate Judge's determination.
The remaining Defendants contend that the Magistrate Judge erred in failing to find the asserted claims indefinite under § 112, ¶ 2, because the claims' preambles recite both a "method" and "apparatus."
Contrary to Defendants' first argument, the R&R expressly recognizes that the relevant inquiry under IPXL is "whether the claim leaves the reader `unclear whether infringement [] occurs when one creates a system that allows the user to [practice the claimed method step], or whether infringement occurs when the user actually [practices the method step]." R&R at 10 (quoting IPXL, 430 F.3d at 1384). The R&R analyzes the claim language, finds that the claims are drawn to methods and concludes that the claims are not invalid for mixed subject matter claiming. Id.
The Court agrees with the Magistrate Judge that the claims are drawn to methods. The claim preambles refer to steps, and the bodies of the claims recite steps rather than capabilities. See id. Although a patent applicant is free to recite features of an apparatus functionally, the claims at issue do not recite such features. Rather, to the extent structure is recited in the claims, that recitation only serves to describe the claimed method steps. See Microprocessor, 520 F.3d at 1374 (finding a method claim not indefinite despite recitation of "structural limitations").
Defendants' reliance on SFA Systems, LLC v. 1-800-Flowers.com, Inc., 940 F.Supp.2d 433, is misplaced. In that case, the body of the claims as a whole made clear that the claims were drawn to an apparatus. Id. at 455. In that light, the Court inferred that the verbs "detect," "infer" and "initiate" recited capabilities of the claimed system. Id. By contrast, the asserted claims here do not claim a system; the claims merely recite that the system performs certain of the method steps while the user performs others. Accordingly, the Court finds no error in the Magistrate Judge's reliance on Microprocessor, nor with the ultimate conclusion that the claims at issue are drawn to methods.
Finally, the R&R does not read out the term "apparatus" from the claims' preamble. To the contrary, the Court will resolve at claim construction any dispute regarding whether this preamble term is limiting, and if so, the extent of that limitation.
The Court has conducted a de novo review of the R&R and concurs with its findings and recommendations. Accordingly, Defendants' Objections are