MARK R. HORNAK, District Judge.
These are a patent infringement cases filed by Intellectual Ventures I LLC and Intellectual Ventures II LLC ("Intellectual Ventures," "IV," or "Plaintiffs") against three separate groups of Defendants: the Erie Defendants,
The Erie and Highmark Defendants have moved to dismiss for lack of subject matter jurisdiction as to one patent (the '581 Patent), Dkt. No. 14-220, ECF No. 74, for failure to state a claim as to two patents (the '581 Patent and the '434 Patent) based on allegations that the patents are directed to patent ineligible subject
The Old Republic Defendants have moved to dismiss all claims against them, alleging that three patents (the '581 Patent, the '434 Patent, and the '002 Patent) are directed to patent-ineligible subject matter, and have requested that the Court take judicial notice of certain documents submitted in support of their Motion. Dkt. No. 14-1130, ECF Nos. 30, 33.
After reviewing the papers filed by all parties and the relevant law, and after extensive, day-long oral argument on April 14, 2015, the Court will grant the Motions to Dismiss for the reasons that follow.
The patents at issue in these suits are: (a) U.S. Patent No. 6,519,581 B1 ("'581 Patent"), entitled "Collection of Information Regarding a Device or a User of a Device Across a Communication Link," (b) U.S. Patent No. 6,510,434 B1 ("'434 Patent"), entitled "System and Method for Retrieving Information From a Database Using an Index of XML Tags and Metafiles," (c) U.S. Patent No. 6,546,002 B1 ("'002 Patent"), entitled "System and Method for Implementing an Intelligent and Mobile Menu-Interface Agent," and (d) U.S. Patent No. 7,757,298 ("'298 Patent"), entitled "Method and Apparatus for Identifying and Characterizing Errant Electronic Files."
The Erie and Highmark Defendants have moved to dismiss infringement claims relating to the '581 Patent on the grounds that this Court lacks subject matter jurisdiction over Plaintiffs' infringement claims as to that Patent because Intellectual Ventures does not own the Patent and therefore lacks standing to assert infringement of it.
Whether this Court has subject matter jurisdiction over the instant action as to the '581 Patent is determined by the law of the Third Circuit because it is a procedural question "not unique to patent law." Univ. of Utah v. Max-Planck-Gesellschaft Zur Forderung Der Wissenschaften E. V., 734 F.3d 1315, 1319 (Fed.Cir.2013) cert. denied sub nom. Caret v. Univ. of Utah, ___ U.S. ___, 134 S.Ct. 2819, 189 L.Ed.2d 785 (2014). "A motion to dismiss for want of standing is properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir.2014) (internal quotation marks and citation omitted).
The Third Circuit would categorize the challenge here as a factual one
In the patent context, plaintiffs suing for infringement bear "the burden to show necessary ownership rights to support standing to sue." Abbott Point of Care Inc. v. Epocal, Inc., 666 F.3d 1299, 1302 (Fed.Cir.2012). To successfully assert standing, a plaintiff "must demonstrate that it held enforceable title to the patent at the inception of the lawsuit" or the infringement claims will be dismissed for lack of jurisdiction. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed.Cir.2010). Patent assignments must be in writing, 35 U.S.C. § 261, and the writing "must show a clear and unmistakable intent to transfer ownership." Univ. Patents, Inc. v. Kligman, 762 F.Supp. 1212, 1219 (E.D.Pa.1991) (citing McClaskey v. Harbison-Walker Refractories Co., 138 F.2d 493 (3d Cir.1943)). Courts interpreting assignment contracts to decide ownership matters look to state law to determine and apply the appropriate rules of interpretation. Abbott, 666 F.3d at 1302.
The Patent Assignment ("Assignment Agreement") at issue here contains a list of seventeen (17) enumerated "patents and patent applications" owned by AllAdvantage.com
Dkt. No. 14-220, ECF No. 76-1, at 5-6 (emphasis added).
The Erie and Highmark Defendants have moved to dismiss all claims relating to the '581 patent, arguing that the Court lacks subject matter jurisdiction because IV cannot carry its burden of showing ownership, and thus has no standing to sue.
IV counters by arguing that in the first place, a presumption of validity applies to the Assignment Agreement because it was recorded with the U.S. Patent and Trademark Office ("USPTO"), and Defendants have not met their burden of disproving ownership. Dkt. No. 14-220, ECF No. 81, at 8, 9. Moreover, Plaintiffs contend that the involved Assignment Agreement by its terms is sufficient to show a transfer of title to the '581 Patent's application (the '858 application) for either of two (2) reasons. First, because the '581 Patent's parent (the '983 Patent), was specifically listed in the Assignment Agreement, and because the '858 application was a direct continuation of that patent, the future patent right in the '581 Patent was contained within the '983 Patent, thus automatically
Furthermore, Plaintiffs argue, the Court is required to at least provisionally accept extrinsic evidence to determine if the contract is susceptible to either party's interpretation, id. at 16, and the extrinsic evidence illustrates the parties' intent to transfer. The extrinsic evidence IV offers to prove intent to transfer the '581 Patent's application through the Assignment Agreement from AllAdvantage to Alset is: (1) a Declaration of Paul Hurley, co-founder of the Assignee, Alset, Inc.; (2) an excerpt from the deposition transcript of Lisa Benado, the attorney who prosecuted the '581 Patent's application; and (3) documents showing actions taken by the parties to the Assignment Agreement after it was executed.
Defendants reply by arguing that the presumption of validity cited by Plaintiffs is purely ministerial and has no effect on the Court's interpretation of what rights were transferred through the Assignment Agreement. Dkt. No. 14-220, ECF No. 84, at 7-8. As a result, they claim that Plaintiffs are simply wrong when they argue that Defendants must disprove intent to transfer ownership — rather, IV retains the burden of demonstrating ownership of the Patent to sustain jurisdiction of this Court. Id. at 8. Defendants further argue that there is no rule of law that automatically transfers related patent applications with their parent patents, and that the cases Plaintiffs cite in that regard are inapposite — in contrast, pending applications must be transferred by a written instrument in the same way as are patents.
As an initial matter, recording an Assignment Agreement which lists multiple patents and applications with the USPTO does not create a presumption that a patent omitted from that express list of assigned property was in fact transferred. "While recording [a patent assignment with the USPTO] creates a presumption in [plaintiffs] favor if the validity of the Agreement is challenged, it has no bearing on the question of what substantive rights
The parties agree that whether an assignment of rights dealing with the '581 Patent application occurred is a matter of California contract law. Dkt. No. 14-220, ECF Nos. 75, at 18-19; 81, at 8-9. However, their views diverge substantially on the question of what California law requires the Court to now do.
California positive law requires that "[t]he language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity," Cal. Civ.Code § 1638 (2015), and states that "[w]hen a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible," id. § 1639. These statements read like the rules of contract interpretation in many other states by which courts preliminarily decide whether a contract is clear on its face and will accept parol (extrinsic) evidence if the contract's terms are ambiguous. See Murphy v. Duquesne Univ. of The Holy Ghost, 565 Pa. 571, 777 A.2d 418, 429 (2001) ("Only where a contract's language is ambiguous may extrinsic or parol evidence be considered to determine the intent of the parties.").
However, California law adds a bit more spice to the contract interpretation recipe: while the familiar rule for many courts is that extrinsic evidence is wholly secondary, and should not be considered absent an ambiguity in the contract's terms, California law seemingly requires courts to consider extrinsic evidence at least a little bit in the first instance, along with the contract text at issue, to determine whether the contract is open to ambiguity. See Pac. Gas & Elec. Co. v. Thomas Drayage & Rigging Co., 69 Cal.2d 33, 69 Cal.Rptr. 561, 442 P.2d 641, 645 (1968) ("[T]he meaning of a writing can only be found by interpretation in the light of all the circumstances that reveal the sense in which the writer used the words. The exclusion of parol evidence regarding such circumstances merely because the words do not appear ambiguous to the reader can easily lead to the attribution to
Wolf, 8 Cal.Rptr.3d at 656 (internal citations omitted).
Despite these broad statements, the extrinsic evidence offered must be "relevant to prove a meaning to which the language of the instrument is reasonably susceptible." Pacific Gas, 69 Cal.Rptr. 561, 442 P.2d at 644. If the contract is not "reasonably susceptible" to the proposed construction, extrinsic evidence should not
In the context of this case, the Court concludes that the Assignment Agreement is not reasonably susceptible to multiple interpretations, with or without the benefit of extrinsic evidence. The Assignment Agreement clearly and unambiguously points to the conclusion that the '581 Patent (or, as is more relevant, its application at the time of transfer) was not among the patents and applications transferred, and the proffered extrinsic evidence shows a bald effort to add the Patent to a list from which it is excluded. The Assignment Agreement is simply not "reasonably susceptible" to that alternate interpretation. Curry, 48 Cal.Rptr.2d at 631; cf. Dow Chem. Co. v. Nova Chems. Corp. (Canada), 458 Fed.Appx. 910, 914 (Fed.Cir.2012) (interpreting Delaware law and finding no ambiguity in a contract attaching a schedule which expressly listed patents and excluded the one at issue; holding that a patent was never transferred and that interpreting the contract otherwise would have required reading the explicit list out of the contract). The Agreement, which is only two (2) pages in length,
With regard to Plaintiffs' first proposed construction of the Assignment, that "said patents" does not actually mean the patents and applications expressly listed but instead means the patents and applications listed in addition to their continuation applications, the Court concludes that saying it is so does not make it so, and the Court simply cannot read that additional language into the Assignment Agreement
The Assignment Agreement here assigns the patents listed. It also assigns many patent applications, also specifically listed. Continuation or not, the Court cannot assume that a patent application meant to be conveyed would not be explicitly listed when fifteen (15) others are expressly included on the list. While the Court recognizes IV's argument, supported by Attorney Benado's deposition testimony that "[t]here's no particular set of assignment language that is universal so there's lots of ways of conveying title," Dkt. No. 14-220, ECF Nos. 81, at 19; 81-3, at 8; see also Minco, Inc. v. Combustion Engineering, Inc., 95 F.3d 1109, 1116-17 (Fed.Cir.1996), there do need to be actual words that would effect a "clear and unmistakable intent to transfer ownership," Kligman, 762 F.Supp. at 1219 (citing McClaskey, 138 F.2d at 499). Without an automatic rule of continuation transfer by operation of law, the Court concludes that it is wholly unreasonable to view the Assignment Agreement as having transferred the '581 Patent or its application.
IV does in fact contend that there is an automatic rule of transfer whereby continuation applications of existing patents move with their parent patents by operation of law when an assignment is executed.
There simply is no legal rule mandating that every time a parent patent is assigned, that patent's continuation application automatically follows. Rather, that "automatic transfer" would have to be based on the agreement of the parties, and generally includes language that transfers all future rights in an invention or an idea, rather than just a patent itself.
That opinion was issued after the Federal Circuit remanded the case in the first instance. In the Federal Circuit's initial (unpublished) opinion, that court wrote:
Bellehumeur v. Bonnett, 127 Fed.Appx. 480, 484-85 (Fed.Cir.2005). The Federal Circuit does not appear to have adopted a rule automatically transferring continuation patent applications with their parent patents in written agreements, and the Court declines to adopt such a rule here. In the absence of such an automatic transfer rule, no amount of extrinsic evidence or argument can demonstrate that the Assignment Agreement is "reasonably susceptible" to IV's proposed interpretation that the phrase transferring "said patents," when included after an express list
IV's second argument, that the phrase "goodwill of the business symbolized by said patents and applications and registrations thereof' encompasses the '581 Patent's application, is similarly unavailing. For this proposed interpretation to be potentially reasonable, the '581 Patent's application would need to be included in the definition of "goodwill." That the Agreement states the "goodwill of the business" is "symbolized by said patents ..." is unhelpful to IV because it follows the same legal fallacy as the previous argument: if only the "said," or listed, patents are transferred, and there is no automatic rule of law that transfers child patent applications along with their parent patents, then the "goodwill of the business symbolized by said patents" refers to the goodwill associated with those said patents only and not unenumerated others. The remaining part of the phrase, "... said patents and applications and registrations thereof' again only references the applications and registrations of the listed ("said") patents.
With regard to Plaintiffs' argument that the '581 Patent's application is necessarily part of the "goodwill" of its parent patent (the '983 Patent) because it is the same intellectual property underlying the parent patent whose goodwill is being transferred, Dkt. No. 14-220, ECF No. 81, at 13-14, the Court has not discerned, nor has IV pointed to, any legal authority which treats pending patent applications synonymously with a general notion of "goodwill." See id. at 13-14 (asserting that the '581 Patent's application is "necessarily included" in the definition of goodwill without citation to authority). Instead, IV only argues that the "goodwill" term is similar enough to language conveying all interest in an "invention," which other courts have interpreted as conveying future rights. Id. at 14.
While a patent application is a form of intangible property, as is goodwill, the argument that the two are the same thing simply does not comport with a reasonable understanding of the term. See generally Weston Anson, The Intangible Assets Handbook 7 (ABA Section of Business Law 2007) (explaining the differences between finite-lived intangible assets like patents and copyrights and those that are indefinite-lived, such as goodwill and many trademarks). While recognizing that this case does not arise in the tax context, it is also notable that in tax matters, patent rights are treated as distinct from "goodwill." Compare 26 U.S.C. § 197(d)(1)(A) with 26 U.S.C. § 197(d)(1)(C)(iii); see also id. § 167(g) (6) (distinguishing depreciation deduction method allowed when dealing with "patents" rather than other intangibles); Newark Morning Ledger Co. v. United States, 507 U.S. 546, 554-56, 113 S.Ct. 1670,
Similar interpretive concepts underlie the principles that courts are not to apply general provisions when a matter is more specifically dealt with in the same enactment, Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 228, 77 S.Ct. 787, 1 L.Ed.2d 786 (1957), and a more specific statute (or here, body of law), should govern over a more general one, Morton v. Mancari, 417 U.S. 535, 550-51, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974) (a general statute will not be held to have repealed by implication a more specific one unless there is "clear intention otherwise"). Patent rights are considered separate and apart from other similar intangible property rights governed by distinct bodies of law, such as copyrights and trademarks, whereas goodwill more appropriately defines those intangible assets which are not already accounted for in other categories of assets.
IV also argues that the Court should not "`read [the Assignment Agreement] to render a provision or term meaningless or illusory.'" Dkt. No. 14-220, ECF No. 81, at 13 (quoting Walker Digital, LLC v. Expedia, Inc., 2014 U.S.App. LEXIS 24712, at *10 (Fed.Cir. Dec. 30, 2014)). The Court agrees, and therefore concludes that it cannot read the Agreement in such a way that would make "said patents" and their "goodwill" essentially interchangeable terms (since according to IV, "goodwill" includes the intellectual property itself), thus rendering one or the other of them meaningless. That Plaintiffs argue the '581 Patent's application could fit within the categories of both "said patents" and "goodwill" proves the point.
Edwards v. Comstock Ins. Co., 205 Cal.App.3d 1164, 1167, 252 Cal.Rptr. 807 (Cal. Ct.App.1988). Similarly in this case, Plaintiffs urge the Court to read the phrase "said patents" to mean "said patents and an additional patent application," and/or the phrase "goodwill symbolized by said patents and applications and registrations thereof' to mean "goodwill symbolized by said patents and at least one additional patent application" or "goodwill, which includes patents and patent applications themselves and is symbolized by said patents as well as any continuation applications of said patents." The Assignment Agreement is on its face not reasonably susceptible to such proposed constructions, since they are in reality alterations or amendments.
Neither the terms of the Assignment Agreement, nor the extrinsic evidence offered by IV, allow the Court to accept Plaintiffs' proposed interpretation of the Assignment Agreement. That proposal essentially boils down to this: (1) Alset meant to negotiate an agreement that included the '581 Patent's application; (2)(a) Alset forgot, when negotiating an agreement that explicitly lists every patent and application being conveyed, to include any reference to the '581 Patent's application, or alternatively, or (2)(b) Alset did not believe it needed to list that application, because it mistakenly believed that transfer of the parent patent would effect a transfer of the continuation child application; and as a result, (3) this Court should somehow read the '581 Patent's application into the Assignment Agreement because that was the subjective intent of one party to the Agreement.
Offered in support of those premises is (i) the declaration of Alset's co-founder saying he meant to own the '581 Patent's application by virtue of this Agreement. But as the moving Defendants point out, that Declaration does not aid the Court in understanding All Advantage's intent as the assignor of rights. Dkt. No. 14-220, ECF No. 84, at 16. And even if it did, the language in the Agreement is not "reasonably susceptible" to that interpretation. Pacific Gas, 69 Cal.Rptr. 561, 442 P.2d at 644; Curry, 48 Cal.Rptr.2d at 631. Also offered in support is (ii) the deposition testimony of Lisa Benado, the attorney who prosecuted the '581 Patent's application. But the Court again agrees with Defendants — her recollection is based on what she believed her client's intent to be, not AllAdvantage's. The expressed intent of one party to an Agreement is not conclusive as to the other party's intent.
Lastly, IV offers (iii) evidence of actions taken after the parties executed the Assignment Agreement: (1) a Revocation of Prior Powers of Attorney, Power of Attorney by Applicant and Notification of Change of Fee and Correspondence Address filed in the prosecution of Patent Application No. 09/844/858 [the '581 Patent's application]; (2) a copy of the '581 Patent, which issued on February 11, 2003; (3) a copy of a Terminal Disclaimer filed in
Notwithstanding this, however, the Court simply cannot conclude that the Assignment Agreement is reasonably susceptible to an interpretation, by its terms, that it conveyed ownership of the '581 Patent's application. Had Plaintiffs provided evidence of AllAdvantage's intent aside from its decision to do nothing to assert a further ownership interest (which is admittedly, not nothing), this might be a closer call. But even under California's wide-ranging "at least take a look at the parol evidence" rule, the evidence offered must be relevant to a reasonable interpretation of the plain terms of the Agreement — it cannot be only relevant to a request to insert further language into the written document. Even conditionally accepting and reviewing the extrinsic evidence offered by Plaintiffs, the Court concludes that it does not provide a reasonable alternative interpretation to the plain terms of the contract. Thus, the contract cannot be deemed ambiguous, and the extrinsic evidence is not admissible to aid in further interpretation.
Additionally, some extrinsic evidence more firmly supports Defendants' position than Plaintiffs'. For one thing, Mr. Hurley's Declaration, while stating he intended to obtain by this acquisition all assets he held in a different company, also states that he negotiated a previous assignment in the '581 Patent's chain of title. Dkt. No. 14-220, ECF No. 81-2, at ¶ 4. That previous assignment, negotiated by Mr. Hurley, specifically lists as part of the assets transferred, both the '983 Patent ('581 Patent's parent) and the '858 application ('581 Patent's application). Dkt. No. 14-220, ECF No. 76-4, at 8. Mr. Hurley did not seem to believe that transfers of parent patents automatically conveyed their child applications at that prior time, so why now? Moreover, Defendants point to the fact that the Assignment Agreement "expressly transferred three family applications of the '983 patent by name and patent number," but did not include the '581 Patent's application.
After appropriately considering the extrinsic evidence within the perhaps unique context of California law, along with the language of the Assignment Agreement, the Court concludes that the Agreement is not reasonably susceptible to any of IV's proposed interpretations. The relevant Assignment Agreement does not transfer the '581 Patent or its application. Thus, there was a break in the chain of ownership of the '581 Patent. This means that IV lacks standing to assert patent infringement claims based on it and the Court
Some iteration of this part of the case is being litigated daily (if not hourly) in federal courts across the country.
Parties asserting infringement, hoping to save their cases and pursue their infringement contentions,
All of these eligibility arguments de jour are presented in this case, at least to some extent, and the Court will address them as appropriate here. Because many of the arguments
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal when a complaint fails to allege facts "sufficient to show that the plaintiff has a `plausible claim for relief.'" Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir.2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). Withstanding a motion to dismiss for failure to state a claim requires plaintiffs to "raise a reasonable expectation that discovery will reveal evidence of the necessary element[s]." Thompson v. Real Estate Mortg. Network, 748 F.3d 142, 147 (3d Cir.2014). Assessing a complaint at the Motion to Dismiss stage requires courts to accept all "well-pleaded
35 U.S.C. § 101 authorizes the grant of a patent to anyone who "invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof...." One exception to these general categories has been the focus of a great deal of litigation. That exception sounds simple: "[l]aws of nature, natural phenomena, and abstract ideas are not patentable." Alice, 134 S.Ct. at 2354. Specifically at issue here is whether the claims of three Patents involved here fall into the "abstract idea" category,
The Supreme Court has instructed the lower courts to apply the following general framework:
If no, the claims are patent eligible. If yes, then courts are to ask:
Alice, 134 S.Ct. at 2355 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. ___, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012)) (internal quotation marks omitted). Claims which yield a "yes" answer to both questions are patent eligible, as are those which generate a "no" answer to the first question. Claims which yield a "yes" to question one, but a "no" to question two are not patent eligible.
Abstract ideas, a concept relevant to the first step, may be "preexisting, fundamental truth[s]" such as mathematical equations, and also encompass "method[s] of organizing human activity" or "longstanding commercial practice[s]" like intermediated settlement or risk hedging. Alice, 134 S.Ct. at 2356. It is important for courts to avoid overgeneralizing when conducting this inquiry, but they must also be cautious of hypersensitivity to technical language, as the inquiry is one of discerning the heart of the patented invention/true nature of the claim. Id. at 2355-57; Ultramercial, 772 F.3d at 714; Accenture Global Services, GmbH v. Guidewire Software, 728 F.3d 1336, 1344 (Fed.Cir. 2013); see also Tranxition, Inc. v. Lenovo (U.S.) Inc., No. 12-01065, 2015 WL 4203469, at *6 (D.Or. July 9, 2015) ("The first step of the Mayo/Alice analysis essentially requires the Court to ask: what are the claims generally trying to achieve?"); Enfish, LLC v. Microsoft Corp., 56 F.Supp.3d 1167, 1173 (C.D.Cal.
The second step requires more than stating the abstract idea and adding the words "apply it," Alice, 134 S.Ct. at 2357, and must include additional features that amount to more than "well-understood, routine, conventional activity," Mayo, 132 S.Ct. at 1298. Preemption concerns are a central factor, as the second step is geared toward weeding out claims that would monopolize, or preempt, use of the abstract idea itself through artful drafting. Alice, 134 S.Ct. at 2357.
In order to assess the patent eligibility of the patents at issue here and to address the parties' enthusiastic arguments in those regards, it is necessary to place them in the context of the evolved legal principles applicable to the task.
In Gottschalk v. Benson, the Supreme Court held that a patent claiming a mathematical formula,
Id. at 70, 93 S.Ct. 253 (quoting Cochrane, 94 U.S. at 787-88). The Court went on to explain that "[t]ransformation and reduction of an article `to a different state or thing' is the clue to the patentability of a process claim that does not include particular machines." Id. at 70, 93 S.Ct. 253. The Court also made plain its concerns regarding pre-emption: "The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that ... the patent would wholly pre-empt
Similarly, in Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978), the Court held that a patent claiming "a formula for computing an updated alarm limit" during catalytic conversion processes in the petrochemical and oil refining industries is not patent eligible. Id. at 586, 98 S.Ct. 2522. The patent's inclusion of "post-solution activity" (in the form of automatically adjusting the alarm limit after implementing the formula) was insufficient to render the claims patent eligible, because then "[a] competent draftsman could attach some form of post-solution activity to almost any mathematical formula" and preempt its use. Id. at 590, 98 S.Ct. 2522. The Court held that "a claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101." Id. at 595 n. 18, 98 S.Ct. 2522.
The Court contrasted the claims in Benson and Flook with those at issue in Diamond v. Diehr to there hold that a "process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter." 450 U.S. 175, 177, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981). The process there at issue addressed a specific problem in the tire production industry — tires had previously been undercured or overcured because there was no way to measure the temperature inside a press without opening it. Id. at 177-78, 101 S.Ct. 1048. The patented process provided for constant measurement of the temperature inside the mold, such measurements being automatically fed into a computer which used a mathematical equation to calculate the cure time and signal the computer to open the press at the optimal time. Id. at 179, 101 S.Ct. 1048.
Unlike the claims at issue in Benson and Flook, which essentially purported to patent mathematical formulas themselves, the Court concluded that while the process in Diehr "admittedly employs a well-known mathematical equation, [it] do[es] not seek to pre-empt the use of that equation." Id. at 187, 101 S.Ct. 1048.
The Supreme Court's consideration of patent eligibility issues next came in Bilski v. Kappos, 561 U.S. 593, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). In Bilski, the
Then, in Mayo Collaborative Servs. v. Prometheus Labs., Inc., ___ U.S. ___, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012), the Court unanimously held that process claims drawn to aiding doctors in determining the adequate dosage levels of certain drugs on autoimmune disease patients by applying natural laws
Finally, in Alice, a unanimous Supreme Court applied its holdings in these cases and held patents which "disclose a computer-implemented scheme for mitigating `settlement risk'" ineligible for patent protection. 134 S.Ct. at 2351.
The Alice Court concluded that (1) the claims at issue there were drawn to an abstract idea, intermediated settlement, id. at 2355, and (2) the claims included no "inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application," id. at 2357 (internal quotation marks and citations omitted). With regard to its conclusion at Alice Step One, the Alice Court analogized the idea of intermediated settlement to patent claims struck down in previous cases, reiterating that mathematical formulas (like Benson's "algorithm for converting binary-coded decimal numerals into pure binary form" and Flook's "mathematical formula for computing `alarm limits' in a catalytic conversion process") and "fundamental economic practice[s]" (such as Bilski's "basic
At Alice Step Two, the Alice Court concluded that the claims recited nothing more than instructions to "implement the abstract idea of intermediated settlement on a generic computer" because the steps directing a computer to "create electronic records, track multiple transactions, and issue simultaneous instructions" are "purely conventional" tasks performed by computers. Id. at 2359. Recognizing that the Alice Step Two inquiry incorporates the Court's pre-emption concerns, the Court reasoned that using a computer to "obtain data, adjust account balances, and issue automated instructions" did not change the analysis, as those functions are all "well-understood, routine, conventional activities previously known to the industry." Id. The Court distinguished Diehr from Benson, Flook, and Mayo, explaining that the mathematical equation in Diehr was not patented on its own, but was instead used "in a process designed to solve a technological problem in `conventional industry practice.'" Id. at 2358. The Court further counseled that neither adding a generic computer along with the words "apply it," nor "limiting the use of an abstract idea to a particular technological environment," will transform an abstract idea into patent-eligible subject matter, id., but claims which "purport to improve the functioning of the computer itself' or "effect an improvement in any other technology or technical field" may withstand scrutiny. Id. at 2359.
Shortly after the Supreme Court ruled in Alice, the Federal Circuit decided Digitech Image Techs., LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed.Cir. 2014). In Digitech, the court of appeals held that method claims "describ[ing] a process of organizing information through mathematical correlations" which was "not tied to a specific structure or machine" claimed an abstract idea.
In buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed.Cir.2014), the Federal Circuit held the claims there at issue were directed to the abstract idea of "creating a contractual relationship — a transaction performance guaranty,"
Then, in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed.Cir.2014), cert. denied sub nom. Ultramercial, LLC v. WildTangent, Inc., ___ U.S. ___, 135 S.Ct. 2907, 192 L.Ed.2d 929 (2015), the Federal Circuit addressed (at the motion to dismiss stage) a representative claim directed toward a method whereby consumers can watch copyrighted media products for free over the Internet in exchange for viewing an advertisement when the advertiser pays for the content. Id. at 712. The case had a long history of appellate review
The Federal Circuit has also held ineligible four (4) patents which had been asserted against banks based on check deposit software in Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'l Ass'n, 776 F.3d 1343 (Fed.Cir.2014). On appeal from a grant of a Rule 12(b)(6) dismissal, the panel unanimously held that patent claims which "generally recite a method of 1) extracting data from hard copy documents using an automated digitizing unit such as a scanner, 2) recognizing specific information from the extracted data, and 3) storing that information in a memory" were patent-ineligible. Id. at 1345. The court concluded that the patents were directed toward the "abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory," id. at 1347, and went on to explain that those concepts are "undisputedly well-known" and performed by humans in general and banks in particular "for some time." Id.
Concluding that the patents were abstract at Alice Step One since they were directed to the basic concepts of "data recognition and storage," id., the Content Extraction court turned to Alice Step Two and concluded that none of the patents' limitations made them patent-eligible because they "merely recite the use of this existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates," which involved nothing more than the use of generic computer components "to perform well-understood, routine, and conventional activities commonly used in industry." Id. at 1348. Attempts to limit the abstract idea to "a particular technological environment" were held insufficient. Id. Moreover, the court found it unnecessary to review each and every claim of the patent to make its determination, reasoning that (1) the district court's own analysis led it to conclude the representative claim sufficed because "all the claims are `substantially similar and linked to the same abstract idea,'" (2) the plaintiff never opposed the designation of specific representative claims in the court below, and (3) the plaintiff failed to identify any other claims that "purportedly contained] an inventive concept." Id.
The singular case from the Federal Circuit to uphold patent eligibility post is DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed.Cir.2014). In a 2-1 decision, the majority described the patent claims as resolving the Internet-specific problem of merchant advertisers "lur[ing] the host website's visitor traffic away" by directing visitors from a host website to a
Distinguishing Ultramercial, the DDR court explained that "the claims at issue here specify how interactions with the Internet are manipulated to yield a desired result — a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink." Id. at 1258. Because the claims viewed together "recite an invention that is not merely the routine or conventional use of the Internet," and since those claims do not threaten preemption of "every application of the idea of increasing sales by making two web pages look the same," the court held the claims patent-eligible,
The DDR dissent by Judge Mayer posited that the patents "fail to meet the demands of section 101 because they describe a goal-confusing consumers by making two web pages look alike — but disclose no new technology, or inventive concept, for achieving that goal." Id. at 1264 (Mayer, J., dissenting) (internal quotation marks and citation omitted). Judge Mayer criticized the patents as "long on obfuscation but short on substance," as they include no more than generic computer elements which are "long-used in e-commerce." Constraining an abstract idea's use to a "particular technological environment" does not necessarily transform it into patent-eligible subject matter. Id. at 1266. Lastly, his dissent focused on preemption concerns: "[t]he potential scope of DDR's patents is staggering, arguably covering vast swaths of Internet commerce." Id. at 1266.
In OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed.Cir. 2015), the Federal Circuit affirmed a grant of judgment on the pleadings on patent eligibility grounds, holding that patent
In Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed.Cir.2015), the Federal Circuit affirmed the grant of a motion to dismiss as to a patent directed to "the [abstract] idea of retaining information in the navigation of online forms." Id. at 1348. The court used guidance from the patent's specification to determine whether additional features were "conventional," and agreed with the district court that limitations like "[a] computer-readable storage medium, comprising computer instructions for" were insufficient to provide an inventive concept, concluding that additional limitations "represent merely generic data collection steps or siting the ineligible concept in a particular technological environment." Id. at 1348-49.
Finally and most recently, the Federal Circuit upheld a district court's determination that claims at issue were not patent eligible in Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed.Cir.2015). In Capital One, the Federal Circuit held claims directed to budgeting claimed an abstract idea.
The Federal Circuit disagreed, explaining that "nowhere does Intellectual Ventures assert that it invented an interactive interface that manages web site content. Rather, the interactive interface limitation is a generic computer element," specifically a "a generic web server with attendant software, tasked with providing web pages to and communicating with the user's computer."
The Court will now assess the pending Motions in the context of this body of authority, but first must address IV's procedural arguments, which are common to its presentations as to each Patent.
As an initial matter, IV's arguments can be broken down into procedural and substantive categories. On the procedural end, IV asserts that the Court should not even conduct the § 101 inquiry because the case is not adequately teed up for such analysis. In addition to arguing that Defendants bear a heightened burden of proof to rebut the presumption of validity, IV also argues that (1) claim construction is necessary before the Court can resolve any issues under § 101, and (2) courts cannot rely on representative claims when conducting the § 101 analysis but must instead review each and every individual claim. Dkt. No. 14-220, ECF No. 52, at 16-20.
As to the latter argument, the Federal Circuit has held it permissible to assess
As to the former argument, the Federal Circuit seems to have concluded that claim construction is desirable, unless in reviewing the patents at issue, a district court concludes that it isn't. Compare Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273-74 (Fed.Cir.2012) (explaining that it "will ordinarily be desirable — and often necessary — to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter"), with OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed.Cir.2015) (affirming grant of judgment on the pleadings of ineligibility) and Content Extraction, 776 F.3d at 1345 (upholding dismissal of the complaint based on ineligibility determination at the Rule 12(b)(6) stage without claim construction). If a court concludes that "the basic character of the subject matter is `readily ascertainable from the face of the patent,'" it may conduct the § 101 inquiry without first construing the claims. Microstrategy Inc. v. Apttus Corp., No. 15-21, 118 F.Supp.3d 888, 890 n. 4, 2015 WL 4425828, at *1 n. 4 (E.D.Va. July 17, 2015) (quoting Cardpool, Inc. v. Plastic Jungle, Inc., No. 1204182, 2013 WL 245026, at *4 (N.D.Cal. Jan. 22, 2013).
In considering the patents at issue here, the Court concludes that claim construction is not necessary prior to conducting the § 101 inquiry. First, Federal Circuit precedent does not mandate that approach, but instead counsels that it is generally desirable only when needed to understand the basic character of the claimed subject matter. Bancorp Servs., L.L.C., 687 F.3d at 1273-74. If the Court
Second, the terms that might need to be construed in this case are largely defined in the Patents, and those definitions amount to "little more than synonyms for generic conventional computer processing steps," Tranxition, 2015 WL 4203469, at *12, or conventional computer components. For instance, in the '581 Patent, any definitional confusion regarding terms such as "discovery agent" or "discovery rule" is resolved within the text of the Patent: discovery rules "may be a series of Boolean operations, mathematical equations, or other comparisons or evaluations of the collected data," that "determine what, if any, action is to be taken based on the collected data," id. at 2:4-6; 3:17-18, and discovery agents are "separate programs (or code sequences)" that "collect information about a device or its user," '581 Patent, at 1:65-2:4; 3:2225.
Third, as was the case in Content Extraction, to the extent that the Court would identify a "factual dispute" during the course of the Court's analysis that was outcome-determinative, the Court would resolve any such dispute in the Plaintiffs' favor at this procedural stage. 776 F.3d at 1349.
Fourth, and bearing on the last point, Plaintiffs had ample time in their extensive briefing and during the marathon oral argument to the Court to identify any claim terms they believed required construction and to then proffer preferred constructions to the Court. They did not do that. While Plaintiffs have generally referenced terms that they thought may require construction, Dkt. No. 14-220, ECF No. 52, at 19, they have not proffered any proposed constructions or explained how any proposed construction would affect the analysis, see Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 Fed.Appx. 988, 991 n. 1 (Fed.Cir.2014) ("Cyberfone argues that claim construction must precede the § 101 analysis, but does not explain which terms require construction or how the analysis would change."); Uniloc USA, Inc. v. E-MD, Inc., No. 14-625, Doc. No. 315, at 5 (E.D.Tex. Aug. 19, 2015) (explaining that where the plaintiff failed to identify any constructions defendants put forth or offer evidence affecting constructions, the court would not "endorse a rule that a § 101 motion can only precede claim construction with a patentee's blessing"); Boar's Head Corp. v. DirectApps, Inc., No. 14-01927, 2015 WL 4530596, at *7 (E.D.Cal. July 28, 2015) ("Although it is defendants' burden to show ineligibility, a court should look to the plaintiff to show some factual dispute requiring claim construction."); DietGoal Innovations LLC v. Bravo Media LLC, 33 F.Supp.3d 271, 289 (S.D.N.Y.2014) (concluding that when patent claims are "sufficiently straightforward," no formal claim construction is required to understand their content).
Because the Court concludes that it is proper to proceed with the § 101 analysis without Markman claim construction, and having addressed and resolved IV's procedural arguments, the Court will now address the Defendants' substantive challenges to the Patents at issue.
The '581 Patent, entitled "Collection of Information Regarding a Device or a User of a Device Across a Communication
These two claims show the method from both sides: while both are drawn to "a method of collecting information," one contains the steps which occur on the "sending" end and the other deals with the "receiving" and responding end. The Court concludes that these claims are representative because the other independent claims are "substantially similar and linked to the same abstract idea" as that of the representative claims. Content Extraction, 776 F.3d at 1348; Ultramercial, 772 F.3d at 712. Those additional independent claims lack material differences: Claim 20 only contains the additional features of describing one way to prompt the transmission of a discovery rule ("a user request"), noting that a discovery agent may be automatically activated "without requiring action by the user," and the post-solution step of "providing the user with a response to the user request." Claims 29 and 39 are essentially the same as Claims 1 and 11, except that they include the use of a "computer readable medium having stored therein a plurality of sequences of executable instructions, which, when executed by a processor, cause the system to" perform the method set forth in the other Claims.
The Erie and Highmark Defendants argue with regard to Alice Step One that the '581 Patent "contemplates [both] broad and trivial uses" of the abstract idea of "collecting information regarding a device or a user of a device." Dkt. No. 14-220, ECF No. 47, at 16. The Old Republic Defendants also contend that the Patent claims an abstract idea, characterizing that idea as "[c]ollecting information across a network and applying a predetermined rule to the collected information to make a decision." Dkt. No. 14-1130, ECF No. 31, at 5. Plaintiffs counter that contrary to Defendants' interpretation, the '581 Patent is in fact not directed to an abstract idea, but instead "to a computer system in which a discovery agent — a specific computer process — residing on a computer system collects computer data using a different computer program or code segment, known as a discovery rule." Dkt. No. 14-220, ECF No. 52, at 20. Arguing that the claims are drawn to "concrete computer technology" including "a computer-readable medium," IV contends that the claims are patent eligible under (citing '581 Patent, at Claim 29).
Further, IV attempts to distinguish the patents at issue in Digitech, buySAFE, Accenture, and Alice, arguing that those patents fell within a narrow class of recognized "abstract legal, business, and economic ideas," as well as one "drawn to a
Claim 1 recites a method for collecting information by (1) transmitting a discovery rule, which is essentially any code sequence, across a communication link, which is essentially any type of network; and (2) applying the code sequence to data about a computer system; in order to (3) generate information that is collected by a different code sequence, a "discovery agent"; and (4) receiving the information from the computer system.
Claim 11 recites the complementary method of (1) receiving a discovery rule, or code sequence, across a communication link, or any network; (2) applying the code sequence to data about a computer system or a user; in order to (3) generate information that is collected by a different code sequence, a "discovery agent," when that code sequence is activated without prompting by a user; and (4) sending the information back across the network to the sender of the discovery rule.
Considering the '581 Patent as a whole, the Court concludes that the idea at the "heart" of the Patent, Ultramercial, 772 F.3d at 714, or "what the claimed invention is trying to achieve," Enfish, 56 F.Supp.3d at 1173, is a method for performing the abstract idea of gathering, storing, and acting on data based on predetermined rules. This is similar to the patent claims that courts have concluded are directed to longstanding, well-known methods of organizing human activity. See, e.g., Capital One, 792 F.3d at 1367 (holding claims directed to "storing, in a database," a user identity with pre-selected rules and limits and "causing communication, over a communication medium and to a receiving device," containing information based on a pre-set limit were directed to the abstract idea of budgeting); Content Extraction, 776 F.3d at 1347 (holding patent ineligible claims directed toward the "abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory"); Digitech, 758 F.3d at 1351 ("[A] process that employs mathematical algorithms to manipulate existing information to generate additional information is not patent eligible."); Accenture, 728 F.3d at 1344 (holding patent-ineligible claims directed toward the idea of "generating tasks [based on] rules ... to be completed upon the occurrence of an event").
Indeed, the Patent merely claims use of mathematical formulas (and is not even limited to specific mathematical formulas) and networked computers to "generate information" and then make decisions based on that information. Using mathematical equations or code sequences (which are unlimited and unspecified) called "discovery rules" and "discovery agents" and implementing those code sequences on a generic computer does not make the underlying idea to which the Patent is directed any less abstract.
Nevertheless, even claims drawn to abstract ideas may be patent-eligible if they contain a sufficient "inventive concept" that would make the claimed material significantly more than a patent on the abstract
The Old Republic Defendants also point out that a discovery rule can be any "comparison or evaluation of the collected data," Dkt. No. 14-1130, ECF No. 31, at 10 (citing '581 Patent, at 3:19-21), and the Patent's application is not limited in any meaningful way, but can instead collect data on "wide ranging examples" spanning from "the font size used in windows that display text; or the user's hobbies, gender, or vacation preferences," id. at 11 (citing '581 Patent, at Fig. 3). Defendants specifically compare Claim 1 of the '581 Patent to the claim held inadequate in buySAFE, 765 F.3d 1350, arguing it is similar to a claim "whereby a computer received a request for information over a computer network, processed that request, and sent information back." Dkt. No. 14-1130, ECF No. 31, at 11.
On the other hand, Plaintiffs state:
Dkt. No. 14-220, ECF No. 52, at 22-23. IV also argues that the claims satisfy the machine-or-transformation test, as they are "expressly tied to a networked computer system and, via the specific claimed software, transform a general computer into a special purpose computer." Id. at 21 (citing Aristocrat Techs. Austral. Pty Ltd. v. Int'l Game Tech., 521 F.3d 1328, 1333 (Fed.Cir.2008)).
The Court concludes that the '581 Patent is extraordinarily broadly drawn. The terms of the Patent itself indicate that "the invention may be practiced without these specific details." '581 Patent, at 2:67-3:1. But in discussing some details, the Patent also states that a "communication link can be any type of communication link using any type of communication medium," describing only one particular embodiment as coupling the client and server "across a network, such as a local area network (LAN), a wide area network (WAN), or the Internet," id. at 5:20-25; "[t]he computer system [shown in a particular figure] may be any type of computer, including a general purpose computer," id.
Additional limitations, while adding "a degree of particularity," do not change the fact that the "concept embodied by the majority of the limitations describes only [an] abstract idea." Ultramercial, 772 F.3d at 715. Discovery rules and discovery agents are also very broadly defined in the Patent, see '581 Patent at 3:19-25 ("[D]iscovery rules may be a series of Boolean operations, mathematical equations, or other comparisons or evaluations of the collected data"; discovery agents are separate programs (or code sequences) from the discovery rules, and there is no particular relationship between the discovery agents and the discovery rules"), and themselves fall into the category of subject matter the Supreme Court declared patent ineligible in Benson and Flook. See Benson, 409 U.S. at 67, 93 S.Ct. 253 (mathematical formula, which could be performed either by the human mind or by a computer, was drawn to patent-ineligible subject matter because it attempted to patent one of the "basic tools of scientific and technological work."); Flook, 437 U.S. at 586, 98 S.Ct. 2522 (holding patent claiming "a formula for computing an updated alarm limit" during catalytic conversion processes in the petrochemical and oil refining industries is not patent eligible). Indeed, there is not even a limit on the number of mathematical formulas claimed in the '581 Patent. Moreover, using the data gathered to trigger some type of system response is the same type of "post-solution activity" rejected in Flook as insufficient to transform the idea into patent-eligible subject matter. 437 U.S. at 590, 98 S.Ct. 2522.
IV points to language contained in the Patent's specification and figures in an effort to salvage the Patent, arguing that terms like "modules" and "discovery engine" are "specific computer processes]." Dkt. No. 14-220, ECF No. 52, at 20 (a "discovery engine" apparently connects discovery agents to discovery rules and "modules" are "specific computer programs which reside within the discovery engine" and perform various functions). But these terms do not save the Patent for two reasons: first, because they also do not appear to be any more limited in scope than terms such as "discovery agent" and "discovery rule"; second, they are not referenced anywhere inside the Patent claims themselves, but are only included in the specification. It is the Patent claims which must contain sufficient limitations to provide an inventive concept to an abstract idea, and while the specification may be useful in informing a court's understanding of the claims, see Internet Patents Corp., 790 F.3d at 1348-49 (using specification to determine that terms were conventional); BASCOM, 107 F.Supp.3d at 654, 2015 WL 2341074, at *15 (using specification to conclude that "filtering schemes are merely `any type of code which may be executed.'"), the Court may not import details from the specification and then call them limitations on the claims, see Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1334 (Fed. Cir.2012) ("In considering patent eligibility under § 101, one must focus on the claims. This is because a claim may `preempt' only that which the claims encompass, not what is disclosed but left unclaimed.").
The '581 Patent lays out a broad method, and in doing so, it claims and thus seeks to preempt the other use of nearly any code sequence or mathematical equation transmitted over any communication network and applied to any data set to trigger pretty much any response. While the '581 Patent states that one example of a "particular discovery rule" in action would be to "generate a warning to the user ... if the available disk space or
Where the claims are so "exceptionally broad and the computer implementation limitations do so little to limit their scope," they are simply not patent eligible. Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed.Cir.2015) ("Indeed, the specification makes clear that this "programming" and the related computer hardware "refers to any sequence of instructions designed for execution on a computer system."); see also Affinity Labs of Texas, LLC v. DirecTV, LLC, 109 F.Supp.3d 916, 944, No. 15-0030, 2015 WL 3764356, at *27 (W.D.Tex. July 7, 2015) (concluding the patent at issue monopolized "the dissemination of regionally broadcasted content to a user outside the region on an electronic device that utilizes cellular communication" partially because of "the scope of the definition in the specification"). And again, the inclusion in some of the claims of "a computer-readable medium", '581 Patent, at Claim 29, also does not change the analysis. OIP Techs., 788 F.3d at 1363 (holding patent-ineligible claims which included "storing test results in a `machine-readable medium,'" because that and other limitations only "require[ed] conventional computer activities or routine data-gathering steps" which did not transform the abstract idea of "offer-based price optimization" into an inventive concept); Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348-49 (Fed.Cir.2015) ("The statement that the method is performed by computer [for a claim using a "computer-readable storage medium"] does not satisfy the test of `inventive concept.' (internal citation omitted)); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed.Cir. 2011) ("CyberSource contends that, by definition, a tangible, man-made article of manufacture such as a `computer readable medium containing program instructions' cannot possibly fall within any of the three patent-eligibility exceptions.... We disagree.").
Prior to oral argument, IV filed a supplemental brief addressing what it says are the implications of the Federal Circuit's decision in Dkt. No. 14-220, ECF No. 55.
As a preliminary matter, the Court disagrees with IV's reading of the Federal Circuit's opinion in DDR. Although Plaintiffs assert that the court there held the claims at issue were not drawn to an abstract idea, see Dkt. No. 14-220, ECF No. 55, at 4 ("[T]he Court held that the challenged claims were not directed to an abstract idea."), this Court sees no such holding in the opinion.
That said, DDR offers guidance with regard to Alice Step Two. The Federal Circuit upheld the claims under § 101 because they "claimed [a] solution [that] is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." DDR Holdings, 773 F.3d at 1257. Not only that, but the claims also "specify how interactions with the Internet are manipulated to yield a desired result — a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink."
Although IV attempts to point out specific "software problems" addressed by the '581 Patent, that argument alone is insufficient to hold a claim patent eligible. See BASCOM, 107 F.Supp.3d at 641, 2015 WL 2341074, at *2 (holding patent-ineligible claims for an "invention designed to overcome the disadvantages in the single-user, local server-based, and server-based configurations by providing individualized, customizable filtering and data storage on the ISP server"). Patent claims cannot simply address a problem on a computer, but must somehow change or improve the computer itself, Alice, 134 S.Ct. at 2359, without also claiming too much and thus preempting use of the abstract idea, Enfish, 56 F.Supp.3d at 1174-75 ("Patents that claim inventions too broadly or prohibit a vast amount of future applications are suspect." (citing Benson, 409 U.S. at 68, 93 S.Ct. 253; O'Reilly v. Morse, 56 U.S. 62, 113, 15 How. 62, 14 L.Ed. 601 (1853))). As the court cautioned in DDR, "not all claims purporting to address Internet-centric challenges are eligible for patent." 773 F.3d at 1258. The '581 Patent is not some "combination of conventional elements [which together] may be unconventional and therefore patentable," Enfish, 56 F.Supp.3d at 1175 (citing Diehr, 450 U.S. at 188, 101 S.Ct. 1048), but is instead a combination of conventional elements that are wholly unlimited in their application. Claims of this nature must "specify how [a] solution" to a computer-centric problem works in order to remove it from the abstract realm. Source Search Techs., 111 F.Supp.3d at 616, 2015 WL 3980628, at *12.
Finally, IV's own characterization of Claim 1 of the '581 Patent states that it "claims a method transmitting a `discovery rule,' a specific computer process, across a communication link in a computer system to collect information about the computer system." Dkt. No. 14-220, ECF No. 52, at 20. That said, the claim, even as defined by Plaintiffs, describes an abstract idea with insufficient limitations that would amount to less than claiming the abstract idea itself. To explain why, the Court will address with brackets where and how the limitations fail in order to illustrate this conclusion: IV claims a "a method transmitting a discovery rule, a specific computer process [but not just one specific computer process, rather any discovery rule, which is defined in the Patent as "a series of Boolean operations, mathematical equations, or other comparisons or evaluations of the collected data"; anything matching the definition counts, according to the Patent, and is therefore claimed as part of the method], across a communication link in a computer system [and again, any communication link will do], to collect information about the computer system [there is similarly no limit on the type of information that could be collected]."
The '581 Patent is drawn to the abstract idea of gathering, storing, and acting on data based on predetermined rules, and its claims
The '434 Patent, entitled "System and Method for Retrieving Information from a Database Using an Index of XML Tags and Metafiles," includes the following representative claims:
This Patent is generally drawn to methods for creating a database using tags to identify various records and then for searching that database. Claims 1 through 6, as well as Claim 25, deal with methods for creating a database and index, while all others deal with methods of searching the database using the index. The Court concludes that Claims 1 and 7 are "substantially similar and linked to the same abstract idea" as the other claims in the Patent, and thus will assess them as representative. Content Extraction, 776 F.3d at 1348; Ultramercial, 772 F.3d at
Claim 1 generally recites a method for creating a database and an index to search that database. It specifically claims the method of (1) creating an index by picking some number of XML tags "including domain tags and category tags;" (2) creating a metafile, or essentially adding additional identifying information onto the tags; and (3) creating a database by compiling some number of records, which can relate back to the index.
Claim 7 generally recites a method for searching a database created with the help of an index and tags. The method claims (1) receiving a request for information; (2) identifying a tag, or some proxy for the information associated with that request; (3) determining whether any other tags are also associated with the request, or whether the request could fall into multiple categories; (4) if multiple tags or other specific information are relevant, combining them; and (5) using the combination to search the database for a record.
Addressing Alice Step One on whether the claims are directed to an abstract idea the Court asks, "[W]hat are the claims generally trying to achieve?" Tranxition, 2015 WL 4203469, at *6. The Erie and Highmark Defendants argue that they merely claim "the abstract idea of creating an index and using it to search a database," Dkt. No. 14-220, ECF No. 47, at 21, and the Old Republic Defendants similarly assert that they claim the idea of "[s]earching for information stored in a database by searching for a combination of `tags' that serve as a proxy for the information," Dkt. No. 14-1130, ECF No. 31, at 5. IV counters that the '434 Patent is directed to a "specific computer solution [rather than an abstract idea], namely retrieving computer files from a computer database system by utilizing an index file that contains specific metadata linked to those files and transforming that data to create a unique key." Dkt. No. 14-220, ECF No. 52, at 23 (citing '434 Patent, Abstract).
But even when framed as a "computer solution" employed on a "computer database system," the Court concludes that the heart of the patented invention, or the true nature of the claims, are indeed drawn to an abstract idea. Alice, 134 S.Ct. at 2355-57; Ultramercial, 772 F.3d at 714; Accenture, 728 F.3d at 1344. The idea in this instance is that of creating an index and using that index to search for and retrieve data. This type of activity is undoubtedly longstanding and can be easily analogized to a great deal of conduct taking place before computers or the Internet even existed. In that vein, the Old Republic Defendants specifically analogize the claims at issue to the same process by which one searches for a book in a library using `tags' as proxies for book titles and authors, identifying specifically the Library of Congress's classification system as one very similar "brick and mortar" analogue. Dkt. No. 14-1130, ECF No. 31, at 5-6; 14.
At bottom, these claims are directed to creating an index and using it to search for and retrieve data, which numerous courts have held to be an abstract idea. See, e.g., Cyberfone, 558 Fed.Appx. at 992 ("[U]sing categories to organize, store, and transmit information is [an abstract idea]."); Mkt. Track, 2015 WL 3637740, at *3 (holding ineligible a patent that read stored data, recognized information within that data, and presented the information in a format which humans could read); Data Distribution Techs., LLC v. BRER Affiliates, Inc., No. 12-4878, 2014 WL 4162765, at *2 (D.N.J. Aug. 19, 2014) (holding a "method of maintaining and distributing database information" "directed to an abstract idea").
The steps of Claim 1 (and Claims 2-6) go to the "creating an index" portion of the idea: XML tags are designated (and "XML tags" are nothing more than "patent-ese" for an information identifier, see '434 Patent, at 7:20-22 ("A tag is generally associated with data or text and conveys information about the data or text."), written in a commonly-used programming language, "extensible Markup Language," id., Abstract), a "metafile" is created (a metafile "is associated with a tag and provides additional information about the data or text described by the tag," id. at 7:22-24), and a database is created and the information sought has its own "XML index component" (an "index is essentially a guide that is used to locate information stored in a database," id. at 2:39-41). These steps can be boiled down to (1) identifying categories that will be used to search; (2) adding sub-categories, or further detail to those categories; and (3) placing records or information that can be identified by those categories into a database.
The steps of Claim 7 are directed to using the index to search for and retrieve information, but are similarly abstract in their explanation. When the patent-ese is stripped away, Claim 7 simply recites the method of (1) receiving a request; (2) identifying the request's relevant category; (3) determining if a subcategory applies; (4) if it does, then determining if another category is also relevant; (5) if a second category is relevant, combine both categories to create one search; and (6) using that single search to find one or more records that fit both categories.
This method, of searching a database and retrieving information, claims an abstract idea. Content Extraction, 776 F.3d at 1347 ("The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions."); Tranxition, 2015 WL 4203469, at *9 (citing Cyberfone Sys., 558 Fed.Appx. at 992 ("the well-known concept of categorical data storage, i.e., the idea of collecting information in
Turning to Alice Step Two, the Court again "considers the elements of each claim both individually and as an ordered combination" to determine whether they present an "inventive concept" that transforms the claim's abstract nature into something "significantly more than a patent upon the ineligible concept itself." Alice, 134 S.Ct. at 2355 (citing Mayo, 132 S.Ct. 1289 (internal quotation marks omitted). Incorporation of typical computer components won't cut it, as the Supreme Court has counseled that the second step requires more than merely stating the abstract idea and applying it on a general computer. Id. at 2357. As instructed by the Supreme Court and Federal Circuit, the Court is at this stage especially wary of broad claims that would preempt too much use of the abstract idea.
The Erie and Highmark Defendants argue that the '434 Patent fails this test because the abstract idea's implementation on a generic computer using XML tags is not inventive, nor does it purport to improve the underlying technology, but rather uses "a combination of well-known and conventional components already present in `most conventional computer systems.'" ECF No. 47, at 23 & n. 10 (quoting '434 Patent, at 5:61-64). The Old Republic Defendants add that the claims are incredibly broad, and the Patent's "preference for implementation on a conventional computer" along with limitations including a "computer-readable medium" do nothing to render it significantly more than a patent on the abstract idea itself. Dkt. No. 14-1130, ECF No. 31, at 14-15.
IV counters that Defendants ignore concrete claim limitations which satisfy the machine-or-transformation test, and attempts to distinguish its '434 Patent from that at issue in cases like Accenture, arguing that this invention "is a new database architecture that employs inventive computer software and data structures." Dkt. No. 14-220, ECF No. 52, at 24. IV also argues that the XML-based database system adds a meaningful limitation in that it shows "the claims do not preempt all uses or organizing information in a database." Id. at 25.
The claims of the '434 Patent, considered both individually and as an ordered combination, fail to provide an additional feature that would transform the abstract idea of creating an index and using that index to search for and retrieve data into patent eligible subject matter. Indeed, the Court concludes from reviewing the claims that the Patent includes little more than the abstract idea itself, and to the extent there are additional limitations, they are "little more than synonyms for generic conventional computer processing steps," Tranxition, 2015 WL 4203469, at *12, which are insufficient to convey an inventive concept under Alice and Mayo. A database is a typical data-storage component of a generic computer, and the ability of a computer to index and search a database according to identifiers such as XML tags is simply not inventive, cf. Ultramercial, 772 F.3d at 717 (explaining that "the transfer of content between computers is merely what computers do" and does not render claims patent eligible).
Of course, there is an argument that the '434 Patent claims computer-specific solutions to problems of slow and inefficient searches of databases, in that it seeks to "eliminate the need to conduct multiple searches" or "maintain multiple databases" by implementing a "universal search vocabulary" that efficiently retrieves search results for users without returning too much irrelevant information. See '434 Patent, at 2:11-12; 22-23. But unlike the claims at issue in DDR, upon which IV relies, efficiently searching for information is not a solution that "is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." DDR Holdings, 773 F.3d at 1257.
The need and desire to efficiently search for records and obtain only the most relevant ones are not made any less abstract when claims that purport to do so are implemented on a computer database. There are manual processes that could achieve the same result — the fact that they would be slower and less accurate does not change the analysis. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed.Cir.2015) ("[R]elying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible."); Capital One, 792 F.3d at 1367 ("Nor, in addressing the second step of Alice, does claiming the improved speed or efficiency inherent with applying the abstract idea on a computer provide a sufficient inventive concept."); MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1267 (Fed.Cir.2012) ("While running a particular process on a computer undeniably improves efficiency and accuracy, cloaking an otherwise abstract idea in the guise of a computer-implemented claim is insufficient to bring it within section 101.") (Mayer, J., dissenting from the majority's disposition of the case on obviousness and anticipation grounds instead of under § 101) (collecting cases). The "brick and mortar" analog of searching for a library book using an index and various categories shows the idea's abstract nature, Source Search Techs., LLC v. Kayak Software Corp., 111 F.Supp.3d 603, 611, No. 11-3388, 2015 WL 3980628, at *7 (D.N.J. July 1, 2015), and specifying generic computer components and processes like "tags," "metafiles," and a "database" do very little to narrow the concept. See Capital One, 792 F.3d at 1370-71 ("Requiring the use of a `software' `brain' `tasked with tailoring information and providing it to the user' provides no additional limitation beyond applying an abstract idea, restricted to the Internet, on a generic computer.").
That the Patent claims a method in reaction to the huge amount of information stored and searched in today's world similarly does not make the claims patent eligible. See MicroStrategy Inc., 118 F.Supp.3d at 895, 2015 WL 4425828, at *4 ("The amount of data does not transform the abstract idea. It has been noted that `data storage is perhaps the textbook example of a conventional computer function.'"
'434 Patent, at 5:5-6 (emphasis added), and does not even require the use of certain limitations, such as XML and metafiles. See e.g., '434 Patent, at Claims 7-18; 27-28 (claims not including XML limitation); id. at 9:22-24 ("Although each XML tag can have an associated metafile, in some implementations there may be XML tags that do not have associated metafiles."). Even assuming these limitations existed in each and every claim, they are no more than "conventional computer components" and are insufficient to confer patent eligibility. Additionally, steps such as receiving a request for information and identifying a tag, then using a key to search the database are "routine, conventional processing steps that any generic computer can perform, and are not, therefore, an inventive concept." Tranxition, 2015 WL 4203469, at *16 (holding patent ineligible a method for transferring customized user settings from and old computer to a new one).
The claims in the '434 Patent are stated at such a high level of generality that the Court has difficulty contemplating any methods of creating an index and using that index to search for and retrieve data on a computer database that would not be preempted by them. It certainly seeks to preempt use of XML tags to create and then search a database on a generic computer, but then also is not limited to using XML tags. Claim 7, which is representative of the searching portion of the Patent, identifies steps that do no more than identify a request for information, narrow the request down to a category (and subcategory if necessary) and then search to locate results. The potential preemptive effect of such claims is extreme, and limitations are lacking which could avoid "preempt[ing] use of this approach in all fields" in order to confer patent eligibility. Alice, 134 S.Ct. at 2354.
The Court concludes that the '434 Patent is directed to an abstract idea and that it does not contain a sufficient inventive concept to remove it from the abstract realm and render it patent eligible under § 101. Defendants' Motions to Dismiss on those grounds will therefore be granted.
The '002 Patent, entitled "System and Method for Implementing an Intelligent and Mobile Menu-Interface Agent" includes the following representative claim:
The '002 Patent claims an invention for "dynamically access[ing] programs, applications, bookmarked URLs, IP addresses, telephone numbers, television channels, radio stations, user profiles, and the like that are specific to a user via any computer type device." '002 Patent,
Abstract. The method claimed is that for accessing a mobile interface that incorporates pointers tied to user specific information that can be retrieved using pointers contained in the interface. Id. at Claim 1. Dependent Claims 2-5 explain what types of user-specific information can be accessed and is drafted broadly, ranging from "programs, applications, files, documents, bookmarked URLs, and user profiles" to "television channels" to "telephone numbers" to "television program listings." Claim 6 contains an added "step of licensing the user specific resources based on a per user licensing model." Dependent Claims 7-10 contemplate the way in which the mobile interface agent is accessed — through the Internet, a LAN, MAN, or WAN, a cellular network, or a television network (e.g., pretty much anything). These generic dependent claims are then repeated at various times throughout the Patent. e.g., Claims 26-33; 35-39; 41-46. The remaining independent claims are "substantially similar and linked" to the same underlying idea as that of the representative claim. Content Extraction, 776 F.3d at 1348; Ultramercial, 772 F.3d at 712. For instance, Claim 11 only varies from Claim 1 in that it claims "retrieving user profile and configuration data from the network server to the local device, wherein the ... data is used to update the data associated with the mobile interface" in addition to the rest of Claim 1. This addition does not meaningfully distinguish Claim 11 from Claim 1. Remaining independent claims, including the system claims, are similarly all directed to the same underlying idea and thus may be assessed using the representative claim noted above.
Claim 1 recites a method for accessing user specific information that is stored either on a device or on a network server. The claimed method is comprised of (1) retrieving a mobile interface (stored on a network server); (2) displaying the mobile interface, which includes pointers to the user specific information, on some local device; and (3) retrieving, or accessing, user specific information using pointers on the interface.
The Court concludes that the '002 Patent as a whole claims the abstract idea of remotely accessing user specific information. At bottom, courts are to get to the heart of the patent, Alice, 134 S.Ct. at 2355-57; Ultramercial, 772 F.3d at 714; Accenture, 728 F.3d at 1344, and not be held up by inclusion of only theoretically limiting components of the claims. Just as the Supreme Court disregarded, for the sake of the Alice Step One analysis, asserted limitations such as correlation of a shadow credit record and shadow debt record to hold claims together were directed to the abstract idea of "intermediated settlement," the Court disregards at this step the use of limitations such as a "mobile interface," which do not alter the abstract nature of the Patent's claims for remotely
The Court will assess the use of the "mobile interface" and other limitations claimed in the Patent on Alice Step Two, but at Alice Step One the '002 Patent is directed to an abstraction. That it is not directed to a mathematical equation or commercial practice does not make the concept of remote access to a user's stored information any more concrete. See Accenture, 728 F.3d at 1344-45 (holding patent ineligible claims directed to the idea of "generating tasks [based on] rules ... to be completed upon the occurrence of an event."); Content Extraction, 776 F.3d at 1347 (holding patent ineligible claims directed to "data collection, recognition, and storage").
At the most basic level, the Court concludes that the claims at issue can be loosely analogized to calling a person from one location in order to obtain information located in another place; this type of interaction amounts to a general "method of organizing human activity." Alice, 134 S.Ct. at 2356; Capital One, 792 F.3d at 1367. While that analogy is a simplification given that the '002 Patent contains limitations taking it out of that very traditional "brick and mortar" realm, the analysis in determining whether the included limitations sufficiently convert the abstract idea into patent eligible subject matter is best handled at Alice Step Two.
Another district court came to this conclusion in addressing the '002 Patent. See Intellectual Ventures I LLC v. Capital One Financial Corp., No. 14-111, 127 F.Supp.3d 506, 2015 WL 5165442 (D.Md. Sept. 2, 2015) (rejecting the Report and Recommendation of a Special Master and concluding the '002 Patent claimed ineligible subject matter). That court held the '002 Patent was "directed to the abstract idea of retrieving data located in another place by using a device with information that pinpoints the data's location to facilitate its retrieval." Id. at 527, at *20. This Court agrees that recitation of a mobile interface does not change this analysis, and that indeed, Alice Step One is not the proper place to consider it. Id. The proper inquiry is not to hone in on various limitations and perhaps hold the underlying concept less abstract because those limitations are integral aspects or because features in the claim language. The test at Alice Step One is to determine whether the idea at the core of a patent is abstract vel non, since at Alice Step One, the Court is to consider the claims "on their face." Id. Remotely accessing user-specific information is just such an idea. Cf. Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348 (Fed.Cir.2015) ("We agree with the district court that the character of the claimed invention is an abstract idea: the idea of retaining information in the navigation of online forms."). Thus, the Court will move on to Alice Step Two.
Alice Step Two requires courts to assess whether each claim's elements, considered "both individually and as an ordered combination," present an "inventive concept" that shows the claims are "significantly more than a patent upon the ineligible concept itself." Alice, 134 S.Ct. at 2355 (citing Mayo, 132 S.Ct. at 1294) (internal quotation marks omitted). The possibility that the patent will "tie up too much future use" of the abstract idea is an important concern addressed at Step Two. Mayo, 132 S.Ct. at 1302.
In reviewing the claims of the '002 Patent, the Court concludes that they lack the requisite inventive concept that would
Apart from the mobile interface, which on its own is not inventive, the Court concludes that limitations such as a "local device," a "network server," and "pointers" are similarly conventional and well-known computer technology. See '002 Patent, at 1:36-41 (defining a "pointer" as a "reference to a type of menu item that can be accessible on the computer, [portable digital assistant], or a server" and stating that "pointers are commonly used to retrieve/access menu items."). That the mobile interface can be retrieved and used "via the Internet," "via a cellular network," "via a television network," or by commonly used networks does not change the analysis. Id. at Claims 7, 9, 10. "[E]xporting user profile and configuration data from a first network to a second network" also fails to provide an inventive concept. See buySAFE, 765 F.3d at 1355 (explaining that "sending" and "receiving" data over a network is "not even arguably inventive"). While IV generally maintains that "[m]any dependent claims further limit both the type of data that the mobile interface agent can access and the type of computer systems upon which the mobile interface operates," Dkt. No. 14-220, ECF No. 52, at 27, the Court divines no such limitations from the language of the claims themselves.
Considering the issue of preemption, the '002 Patent explicitly states that it governs "dynamic access" to a broad swath of information "via any computer type device." '002 Patent, Abstract (emphasis added). As the Old Republic Defendants point out, the '002 Patent states that there are "countless uses of the present invention," and the Patent specifically enumerates broad categories of covered usage from "conduct[ing] online financial transactions more efficiently" to "us[ing] the user profile on the network for online advertising or promotional services." Id. at 8:7-13; Dkt. No. 14-1130, ECF No. 31, at 16. The claims do not lend themselves, either individually or as an ordered combination, to concluding that the invention would not preclude any attempt to design another invention for remote access to user-specific
A desire to remotely access user-specific information also is not a problem arising only in the computer context. As noted above, the abstract idea underlying the '002 Patent existed long before computer technology existed and has analogues in the brick and mortar context — it therefore does not contain the type of claims held patent eligible in DDR Holdings, 773 F.3d at 1257. Even if it did address a problem "rooted in computer technology," id., its claims would need to specify "how that solution works," Source Search Techs., 111 F.Supp.3d at 617, 2015 WL 3980628, at *12. Claiming systems and methods that involve nothing more than (1) "retrieving a mobile interface from a network server to the local device"; (2) displaying the interface on the device and including pointers which correspond to user preferences; and (3) retrieving that user-specific information "using a plurality of pointers," which are themselves commonly used, threatens to preempt too much and simply does not provide the type of inventive concept necessary to render the claims patent eligible under § 101.
The Court concludes that the claims of the '002 Patent are directed to patent ineligible subject matter. The Old Republic Defendants' Motion to Dismiss claims relating to that Patent will therefore be granted.
For the foregoing reasons, and upon review of the Patents at issue, the parties' briefs, and the arguments raised in open Court, the Court grants the Motion to Dismiss the claims as to the '581 Patent without prejudice for lack of subject matter jurisdiction, and also grants the Erie and Highmark Defendants' Motion to Dismiss based on patent ineligibility as to the '434 Patent with prejudice. Moreover, if the Court concluded that it had jurisdiction as to the '581 Patent, it would also grant the Motions to Dismiss on patent ineligibility grounds with prejudice. Finally, the Court grants the Old Republic Defendants' Motion to Dismiss as to the '434 Patent and the '002 Patent with prejudice. Because the Court concludes the '002 Patent is not directed to patent eligible subject matter, claims based on infringement of it against the Erie and Highmark Defendants must also dismissed with prejudice.
An appropriate Order will issue.
However, as Justice Baxter explained in Dore, the majority, at least in that case, no longer appeared to adopt quite as broad a view of Pacific Gas, and instead seemed to hold that "a `latent' ambiguity is simply one that becomes manifest when one attempts to apply the contract's language to the specific facts that gave rise to the parties' legal dispute. Even then, extrinsic evidence is admissible only to prove a meaning the contract's language will reasonably accommodate." Dore, 46 Cal.Rptr.3d 668, 139 P.3d at 63 (Baxter, J., concurring). This reading seems to best comport with California positive law that "[t]he language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity," Cal. Civ. Code § 1638 (2015), and "[w]hen a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible," id. at § 1639, as well as a long line of other California cases (though predominantly in the insurance context), which note that traditional contract interpretation rules apply and then never mention extrinsic evidence, see, e.g., State v. Cont'l Ins. Co., 55 Cal.4th 186, 145 Cal.Rptr.3d 1, 281 P.3d 1000, 1004-05 (2012), as modified (Sept. 19, 2012) ("[I]ntent is to be inferred, if possible, solely from the written provisions of the contract. If contractual language is clear and explicit, it governs.") (internal quotation marks and citations omitted).
Of note, even the court in Pacific Gas recognized that "extrinsic evidence is not admissible to add to, detract from, or vary the terms of a written contract" — the court stated only that courts should at least take a quick look at extrinsic evidence before recognizing its relevance or irrelevance in a given scenario. 69 Cal.Rptr. 561, 442 P.2d at 645.
Curry v. Moody, 40 Cal.App.4th 1547, 48 Cal.Rptr.2d 627, 631 (1995) (internal citations omitted).
Hendrie, 98 U.S. at 553-54. The opinion later states:
Id. at 554 (emphasis added).
What this demonstrates is that the terms of an assignment are what govern the scope of what is transferred, not some "automatic" rule. And the Court agrees with Defendants that there are meaningful distinctions between the contractual language in cases like Okuley (transferring "the entire right, title, and interest in an invention") and DDB Technologies (conveying "ideas, inventions and improvements") which broadly conveys "inventions" or "ideas" to effect transfers of future rights by the agreement of the parties, as opposed to specifically enumerated patents and patent applications as in this case. See Dkt. No. 14-220, ECF No. 84, at 9-10 (comparing language of the Assignment Agreement with that in other cases).
So while the district court in Euclid had concluded that the agreement was unambiguous and conveyed all continuations-in-part of the listed patent (including the continuation-in-part which had issued before the agreement was executed), the Federal Circuit held that the assignment was ambiguous because it included all continuations-in-part, but also included a specific list which omitted the already-issued patent. Id. at 1343. Here, by contrast, the Assignment Agreement does not include language which would convey all continuations of listed patents, and also does not include the '581 Patent or its application. The Assignment Agreement therefore lacks the type of contradiction which the Federal Circuit determined to be ambiguous in Euclid.
That debate does not carry over to this lawsuit, however, because no Defendant contests that the presumption of validity and the clear and the convicting evidence standard apply. See Dkt. No. 14-220, ECF No. 47, at 13 (Erie and Highmark Defendants' opening brief assuming the attachment of the presumption of validity and the application of the clear and convincing evidence standard); Dkt. No. 14-220, ECF No. 97, at 59:18-23 (Old Republic Defendants' statement that presentation assumes the presumption applies); Dkt. No. 14-1130, ECF No. 31, at 10 n. 3 ("Old Republic's argument is presented herein as if the `clear and convincing evidence' standard somehow applies"); Dkt. No. 14-220, ECF No. 56, at 20 (same). See DataTern, Inc. v. Microstrategy, Inc., No. 11-12220, 2015 WL 5190715, *7 (D.Mass. Sept. 4, 2015).
The Court will therefore assume that the patents at issue are presumptively valid and that the Defendants have the burden of demonstrating they are not directed to patent-eligible subject matter by clear and convincing evidence. The Court notes, however, that the clear and convincing standard also likely only applies to factual disputes which may underlie the § 101 analysis and not to the ultimate legal question. Execware, 2015 WL 4275314, at *3.
Id.
Alice, 134 S.Ct. at 2352 n. 2.
Mayo, 132 S.Ct. at 1305 (citation omitted).
Id. at 1351.
Id.
Id. at 1367.
Id. at 1369.
Unlike the "particular," "disclosed" algorithms summarized by the Federal Circuit, id., one of the primary Alice problems with the '581 Patent is the limitless nature of the term "discovery rules," which according to the Patent covers a broad swath of possibilities, as discovery rules "may be a series of Boolean operations, mathematical equations, or other comparisons or evaluations of the collected data," '581 Patent, at 3:19-22.
Akin to other claims held patent ineligible, the '581 Patent "expressly disavows any requirement for specific programming or architecture." Mkt. Track, LLC v. Efficient Collaborative Retail Mktg., LLC, No. 14-4957, 2015 WL 3637740, at *9 (N.D.Ill. June 11, 2015); see also Thales Visionix, Inc. v. United States, 122 Fed.Cl. 245, 256 (Fed.Cl.2015) (MOT test failed because "transforming data from one form to another does not qualify as the kind of transformation regarded as an important indicator of patent eligibility" (internal quotation marks and citation omitted)).
