STARK, U.S. District Judge:
Pending before the Court are Defendant Gameloft, Inc.'s ("Gameloft") Motion for Judgment on the Pleadings Pursuant to Federal Rule of Civil Procedure 12(c) (C.A. 14-1067, D.I. 13) and Defendants King.com Ltd. ("King.com"), Glu Mobile Inc. ("Glu Mobile"), ngmoco, LLC ("ngmoco"), Rovio Animation Company ("Rovio"), and Supercell, Inc.'s ("Supercell") (collectively with Gameloft, "Defendants") Motions to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (C.A. 14-1068, D.I. 10; C.A. 14-1070, D.I. 11, D.I. 16; C.A. 14-1071, D.I. 10; C.A. 14-1072, D.I. 10; C.A. 14-1073, D.I. 10).
U.S. Patent No. 8,784,198 ("the `198 patent"), entitled "Method and Apparatus for Conducting or Facilitating a Promotion," "relates generally to a method and apparatus for conducting a promotion and, more particularly, to a method and apparatus for distributing promotions to potential participants and for allowing the promotion participants to receive benefits associated with the promotions." (`198 patent at 1:28-32) It was filed on January 4, 2013 and issued on July 22, 2014. (Id.) The claimed methods are generally directed to "facilitating
On August 19, 2014, Plaintiff Inventor Holdings, LLC ("Inventor Holdings" or "Plaintiff") filed separate actions alleging infringement of the `198 patent against each Defendant: Gameloft (C.A. 14-1067, D.I. 1), Glu Mobile (C.A. 14-1068, D.I. 1), King.com (C.A. 14-1070, D.I. 1), ngmoco (C.A. 14-1071, D.I. 1), Rovio (C.A. 14-1072, D.I. 1), and Supercell (C.A. 14-1073, D.I. 1). The cases have not been consolidated.
Gameloft answered Plaintiffs complaint on October 10, 2014. (C.A. 14-1067, D.I. 9) Gameloft subsequently filed its Motion for Judgment on the Pleadings on November 21, 2014. (C.A. 14-1067, D.I. 13) Briefing on Gameloft's motion was completed on December 18, 2014. (C.A. 14-1067, D.I. 14, 18, 22) Thereafter, Gameloft filed a Notice of Supplemental Authority on March 25, 2015 (C.A. 14-1067, D.I. 32), to which Plaintiff filed Objections on March 26, 2015 (C.A. 14-1067, D.I. 33). Gameloft filed additional Notices of Supplemental Authority on June 16, 2015 and September 1, 2015. (C.A. 14-1067, D.I. 36, 37) On April 7, 2015, the action against Gameloft was stayed pending resolution of Gameloft's motion. (See C.A. 14-1067, D.I. 35)
Glu Mobile, ngmoco, Rovio, and Supercell filed their Motions to Dismiss on October 10, 2014. (C.A. 14-1068, C.A. 14-1071, C.A. 14-1072, C.A. 14-1073, D.I. 10)
King.com filed its first Motion to Dismiss on November 21, 2014. (C.A. 14-1070, D.I. 11) Subsequently, Plaintiff filed an Amended Complaint on December 4, 2014 (C.A. 14-1070, D.I. 13), which King.com moved to dismiss on December 12, 2015 (C.A. 14-1070, D.I. 16). Briefing on King.com's motion was completed on January 8, 2015. (C.A. 14-1070, D.I. 17, 21, 24) Thereafter, King.com filed a Notice of Supplemental Authority on March 19, 2015 (C.A. 14-1070, D.I. 29), to which Plaintiff filed Objections on March 26, 2015 (C.A. 14-1070, D.I. 30). King.com filed additional Notices of Supplemental Authority on June 16, 2015 and September 1, 2015. (C.A. 14-1070, D.I. 33, 34) On April 7, 2015, the action against King.com was stayed pending resolution of Glu Mobile's motion. (See C.A. 14-1070, D.I. 32)
Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
However, "[t]o 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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). 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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). 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 plaintiffs 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-evidently false," Nami v. Fauver, 82 F.3d 63, 69 (3d Cir.1996). "[A] complaint may be subject to dismissal under Rule 12(b)(6) when an affirmative defense... appears on its face." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994).
Pursuant to Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings "[a]fter pleadings are closed — but early enough not to delay trial." When evaluating a motion for judgment on the pleadings, the Court must accept all factual allegations in a complaint as true and view them in the light most favorable to the non-moving party. See Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir.2008); see also Maio, 221 F.3d at 482. This is the same standard as applies to a Rule 12(b)(6) motion to dismiss. See Turbe v. Gov't of Virgin Islands, 938 F.2d 427, 428 (3d Cir.1991).
A Rule 12(c) motion will not be granted "unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law." Rosenau, 539 F.3d at 221. "The purpose of judgment on the pleadings is to dispose of claims where the material facts are undisputed and judgment can be entered on the competing pleadings and exhibits thereto, and documents incorporated by reference." Venetec Int'l, Inc. v. Nexus Med., LLC, 541 F.Supp.2d 612, 617 (D.Del.2008); see also Burlington Coat Factory, 114 F.3d at 1426 (explaining that any documents integral to pleadings may be considered in connection with Rule 12(c) motion). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is
The Court may consider matters of public record as well as authentic documents upon which the complaint is based if attached to the complaint or as an exhibit to the motion. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n. 2 (3d Cir.1994). The Court may also take judicial notice of the factual record of a prior proceeding. See Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 416 n. 3 (3d Cir.1988). Ultimately, a motion for judgment on the pleadings can be granted "only if no relief could be afforded under any set of facts that could be proved." Turbe, 938 F.2d at 428.
The ultimate question of patent eligibility is an issue of law, making it an appropriate basis for a Rule 12(c) See In re Bilski, 545 F.3d 943, 951 (Fed.Cir.2008), aff'd Bilski v. Kappos, 561 U.S. 593, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). The Federal Circuit has affirmed District Courts that have granted motions for judgment on the pleadings based on § 101 challenges. See, e.g., OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1360 (Fed.Cir.2015); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.Cir.2014),
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). Pertinent here is the third category, "abstract ideas," which `embodies the longstanding rule that an idea of itself is not patentable.' Alice Corp. Pty. Ltd. v. CLS Bank Int'l, ___ U.S. ___, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014) (internal quotation marks omitted). "As early as Le Roy v. Tatham, 55 U.S. 14 How. 156, 175, 14 L.Ed. 367 (1852), the Supreme Court explained that `[a] principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.' Since then, the unpatentable nature of abstract ideas has repeatedly been confirmed." In re Comiskey, 554 F.3d 967, 977-78 (Fed.Cir.2009).
In Mayo Collaborative Servs. v. Prometheus Labs., Inc., ___ U.S. ___, 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, 134 S.Ct. at 2355. First, courts must determine if the claims at issue are directed at a patent-ineligible concept. 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." Id.
"Simply appending conventional steps, specified at a high level of generality, [is] not
In determining, at the second step, if a patent embodies an inventive concept, courts may consider whether the process "is tied to a particular machine or apparatus" or "transforms a particular article into a different state or thing." Kappos, 130 S.Ct. at 3225. "[T]o impart patent-eligibility to an otherwise process under the theory that the process is linked to a machine, the use of the machine must impose meaningful limits on the claim's scope." CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed.Cir. 2011) (internal quotation marks omitted). To be "a meaningful limit on the scope of the claims," the addition of a machine "must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly." SiRF Tech., Inc. v. ITC, 601 F.3d 1319, 1332-33 (Fed.Cir. 2010). Hence, the "mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention." Alice, 134 S.Ct. at 2358. "Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of additional feature that provides any practical assurance that the process is more than a drafting effort designed to monopolize the abstract idea itself." Id.
"[T]he machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101." Bilski, 130 S.Ct. at 3227. However, it is "not the sole test for deciding whether an invention is a patent-eligible `process.'" Id. "[I]n applying the § 101 exception, [courts] must distinguish between patents that claim the building blocks of human ingenuity and those that integrate the building blocks into something more, thereby transforming them into a patent-eligible invention." Alice, 134 S.Ct. at 2354 (internal citation and quotation marks omitted). The "concern that drives the exclusionary principle [i]s one of pre-emption." Id. That is, where a patent would pre-empt use of basic tools of scientific and technological work, i.e., laws of nature, natural phenomena, and abstract ideas, the patent would "impede innovation more than it would tend to promote it, thereby thwarting the primary object of the patent laws." Id. (internal quotation marks omitted).
Defendants contend that all claims of the '198 patent are patent-ineligible under the analytical framework set forth in Mayo and Alice. Specifically, Defendants argue that the `198 patent "claims the economic strategy and abstract idea of providing an `unlock code' in exchange for a qualifying activity for an `outcome' to reveal the benefit of the locked `outcome.'" (C.A. 14-1071, D.I. 11 at 2; C.A. 14-1067, D.I. 14 at 2; see also D.l. 17 at 2 ("The independent claims of U.S. Patent No. 8,784,198 are
Plaintiff responds that Defendants mischaracterize the underlying concepts of the claimed invention by "not view[ing] the claim as a whole" and ignoring the "express limitations" of the claims. (See C.A. 14-1070, D.I. 21 at 10, 12) Plaintiff argues that the invention of the `198 patent is not directed to an abstract idea but instead is "particular to mobile device gaming." (Id. at 12) Plaintiff emphasizes that "the claimed technology necessitates the use of discrete computer hardware and software components configured and programmed in a particular way that enable performance of the specified functions carried out in the context of a mobile game." (Id. at 13)
Independent claim 1 recites the following:
(`198 patent at 38:50-39:2)
The only other independent claim, claim 18, is similar to independent claim 1 except that its recited steps are performed by a computer-readable medium instead of a mobile device:
(Id. at 40: 13-27)
The various dependent claims provide basic variations on the elements of the independent claims, such as: the source of the signal being either the mobile device's "input mechanism" (id. at 39:3-8, 40:38-41) or "a third party via a network" (id. at 39:9-15, 40:42-46); the locked outcome being previously "stored in a memory" and subsequently "retrieved" or "accessed" (id. at 40:28-37), "stored in an encrypted form" (id. at 39:22-27, 40:55-61), or "download[ed]... over the internet" (id. at 39:28-31, 40:51-54); the method further comprising "receiving a request to use a previously stored unlock code" (id. at 39:16-21, 40:47-50); the processor being able to "receive indication of payment from the user ... for the unlock code" (id. at 39:32-35, 40:62-65) and further requiring "verifi[cation] that payment for the unlock code has been provided from the user" (id. at 39:36-43); various forms of intra-game benefits (id. at 40:4-10, 40:66-41:5), including "an advancement within the game," and further requiring the unlock code for "advancement in the game" (id. at 39:44-48, 41:6-11); the use of a "second software program to download at least one of the first software program and a decryption algorithm into the memory" (id. at 39:49-53); the processor being able "to verify that the user has completed a qualifying activity that is a prerequisite to unlocking the locked outcome" (id. at 39:54-57, 41:12-18) and further "wherein the qualifying activity is watching a specified advertisement" (id. at 39:58-59, 41:19-21);-and the use of a "GPS detector" (id. at 39:60-64, 41:22-25) and further "determin[ing] an intra-game benefit based on the location" (id. at 39:65-40:3, 41 :26-29).
Plaintiff argues that the Court should not decide patentability before ruling on claim construction, insisting, "[a]t most, Defendant has raised disputed material fact issues." (C.A. 14-1070, D.I. 21 at 15 n.7)
Here, the closest any party comes to showing any claim construction dispute that is relevant to the § 101 analysis is Defendants' contention (with which Plaintiffs disagree) that the "unlock code" and "unlocked outcome" terms should be construed so as to include "roll[ing] a set of doubles" and "being able to move forward [in a board game]." The Court agrees with Defendants that "the vast breadth of the claim language and the specification of the `198 Patent" (C.A. 14-1071, D.I. 11 at 19) provide a sufficient basis for the Court to resolve the particular claim construction issue raised by Plaintiff.
More precisely, the Court agrees that "unlock code" and "unlocked outcome" should be given their full, plain and ordinary meaning in the context of the `198 patent's claims.
Thorner v. Sony Computer Entm't Am. LLC, 669 F.3d 1362, 1365 (Fed.Cir.2012) (internal citation omitted). Here, neither exception is present. To the contrary, the specification emphasizes the breadth with which the inventors were using the terms "unlock code" and "unlocked outcome":
(`198 patent at 5:16-59) (emphasis added) Defendants' example of "roll[ing] a set of doubles" is "a numerical or alphanumerical sequence" and comes within the plain and ordinary meaning of "unlock code."
Likewise, the patent specification expressly indicates that "unlocked outcome" should be broadly construed to have its plain and ordinary meaning. To begin with, "locked" encompasses virtually all ways that the outcome can be locked:
(Id. at 5:7-15) (emphasis added) Similarly, `outcome' includes a large variety of outcomes:
(Id. at 12:48-67) (emphasis added) Defendants' example of a prize or benefit associated with an outcome being "allow[ing] a user to ... progress ... the game" is within the plain and ordinary meaning of "unlocked outcome."
Accordingly, Defendants' analogy of "playing a board game and not being able to move forward until you roll a set of doubles" (C.A. 14-1070, D.I. 17 at 6) is not an "attempt[] to construe claim 18 and dependent claims by ignoring elements of the claims and descriptions in the specification" (C.A. 14-1070, D.I. 21 at 10). With this in mind, the Court turns to the Mayo analysis.
"Under step one of Mayo/Alice, the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter." Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed.Cir. 2015).
Plaintiff argues that the '198 patent "claims a specific solution to a specific problem associated with gaming on a mobile device, which itself is a recent advance.... Prior to the '198 patent, merchants conducting promotions faced problems dynamically changing a rule, benefit, prize, entry criteria, or redemption criteria." (C.A. 14-1070, D.I. 21 at 3) (citing '198 patent at 1:33-2:17) Plaintiff does not, however, assert that the claims of the '198 patent solve a problem
Plaintiff further attempts to distinguish the claims of the '198 patent from the claims at issue in Bilski and Alice by arguing that they are not directed to a "fundamental economic practice." (Id. at 12) However, the Supreme Court did not "delimit the precise contours of the `abstract ideas' category" in Alice, and Plaintiff cites no authority for the suggestion that "abstract ideas" are limited to fundamental economic practices. See Alice, 134 S.Ct. at 2357. In any event, the Court concludes that the "character as a whole" of the claims of the '198 patent are directed to a fundamental economic practice (as already explained and as further discussed below).
Plaintiff emphasizes that the Examiner considered "many ... articles and publications... during publication ... that relate to promotions or coupons and are directed to the same purported `abstract idea' identified in Defendant's Motion." (C.A. 14-1070, D.I. 21 at 13) This fact does not help support a finding that the claims of the
The Court agrees with Defendants that the claims of the '198 patent are directed to the economic strategy and abstract idea of "providing an `unlock code' in exchange for a qualifying activity for an `outcome' to reveal the [intra-game] benefit of the locked `outcome'" (C.A. 14-1071, D.I. 11 at 2; C.A. 14-1067, D.I. 14 at 2), or, put more simply (yet still accurately), "using a code to unlock a benefit[] in a game" (C.A. 14-1070, D.I. 17 at 14). This abstract concept is not unlike the rules for any number of long-extant promotions, lotteries, or games, or other efforts to entice people to try a product or service. (See, e.g., '198 patent at 1:33-37 (describing prior art and stating, "[m]erchants and manufacturers often use promotions to entice people to try or purchase products, shop or conduct transactions in certain stores, or to make people aware of products, store locations, etc."); see also C.A. 14-1071, D.I. 11 at 12-13 (`The specification of the '198 Patent itself discloses both a conventional lottery-like implementation of concept where a player enters a drawing for a chance to win a prize, and a non-lottery implementation where a player obtains locked outcomes and then obtains unlock codes to determine the prizes contained in the locked outcomes.")) Further, as described above, the various dependent claims do no more than provide variations of the abstract idea applied to a generic mobile device or computer-readable medium.
Moreover, the claims of the '198 patent bear striking similarities to other types of subject matter that the Federal Circuit has found to be patent-ineligible. See Ultramercial, Inc. v. Hulu LLC, 772 F.3d 709, 714 (Fed.Cir.2014) (finding claims directed to users being given access to copyrighted media after viewing an ad to be unpatentable); Planet Bingo, LLC v. VKGS LLC, 576 Fed.Appx. 1005, 1008 (Fed.Cir.2014) (finding claims for computerized bingo game unpatentable); Gametek, 597 Fed.Appx. 644 (Fed.Cir.2015) (finding patent directed to offering mid-game purchases in a video game failed to claim patent-eligible subject matter); buySAFE, 765 F.3d at 1355 (holding that "receiving a request" and "transmitting an offer in return" were abstract concepts). Like the claims at issue in these earlier cases, the '198 patent's claims recite limitations directed to receiving user inputs and responding to them by transmitting corresponding outcomes to the user. All of this further supports a conclusion that the '198 patent is directed to an abstract idea.
Thus, the Court concludes that all the claims of the '198 patent are directed to an abstract idea. It is necessary, then, to proceed to the second step of the analysis.
The claims of the '198 patent may still be patent-eligible if they include an "inventive concept" sufficient to "ensure that the patent in practice amounts to significantly
In both independent claims, the only steps that do not explicitly relate to the abstract idea relate either to a generic "mobile device comprising: an input mechanism ...; a display screen ...; a processor; [and] a memory ... operable to store a first software program ..." in the case of claim 1 (`198 patent at 38:50-60), or to a "computer-readable medium storing instructions for directing a processor of a mobile device to perform [the] method" in the case of claim 18 (id. at 40: 13-15). However, "limiting the use of an abstract idea to a particular technological environment" is "not enough for patent eligibility." Alice, 134 S.Ct. at 2358 (internal quotation marks omitted).
The '198 patent's claims are implemented using generic mobile device technology that existed well before the priority date of the '198 patent. This is evident from the '198 patent's specification, which states:
(`198 patent at 37:24-38:9) (emphasis added) Thus, here, as in Bancorp, "[t]he computer required by [the] claims is employed only for its most basic function, ... and as such does not impose meaningful limits on the scope of those claims." 687 F.3d at 1278.
Plaintiff disputes these conclusions in several ways, all of which are unavailing.
The same is true for the dependent claims. For instance, verification of a qualifying activity pursuant to dependent claim 12 (id. at 39:54-57) can be performed by the "intermediary's representative ... describ[ing] or attempt[ing] to ascertain the user's interest level in the can of soup" (id. at 25:67-26:8).
The claims, therefore, do not satisfy the machine-or-transformation test because neither the claims nor the specification of the '198 patent recite any machine that plays a "significant part in permitting the claimed method to be performed." SiRF Tech., 601 F.3d at 1333 (emphasis added). Rather, the "standard" mobile device and computer-readable medium recited as implementing the claimed invention (`198 patent at 38:50-60, 41:13-15) is used "solely as an obvious mechanism for permitting a solution to be achieved." SiRF Tech., 601 F.3d at 1333.
Second, Plaintiff argues that the claims do not preempt every application of the abstract idea to which they are directed, pointing out that "the cited prior art remains available for practice by Defendant." (C.A. 14-1070, D.I. 21 at 3)
Moreover, the Federal Circuit recently stated: "Where a patent's claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, as they are in this case,
Finally, Plaintiff analogizes the claims of the '198 patent to the claims at issue in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed.Cir.2004). Plaintiff argues that, as in DDR, the claims of the `198 patent "do not recite ... a commonplace business method aimed at processing business information, applying a known business process to the particular technological environment of the Internet, or creating or altering contractual relations using generic computer functions and conventional network operations." Id. at 1259. In the Court's view, however, as discussed above, the claims here
Yet, conventional steps, specified at a high level of generality, are the sum total of what the claims of the '198 patent monopolize. Although the claims of the '198 patent are limited to a particular technological environment — i.e., mobile devices — this does not save them from being ineligible for patentability. See id. at 2358.
Therefore, the Court determines that the claims of the '198 patent are ineligible under § 101, because they are directed to an abstract idea and include no inventive concept under Mayo/Alice.
For the reasons given above, all claims of the '198 patent are directed to patent-ineligible subject matter under 35 U.S.C. § 101. The Court will grant Defendants' motions. An appropriate order follows.