Summary
declining to consider invalidity of unasserted claims
Summary of this case from Distefano Patent Tr. III, LLC v. Linkedin Corp.Opinion
CIVIL ACTION NO. 2:16–CV–00741–RWS (LEAD) CIVIL ACTION NO. 2:16–CV–00858–RWS
09-28-2017
UNILOC USA, INC. and Uniloc Luxembourg, S.A., Plaintiffs, v. ADP, LLC, Defendant. Big Fish Games, Inc., Defendant.
Charles Craig Tadlock, Tadlock Law Firm, Plano, TX, Paul J. Hayes, Aaron Seth Jacobs, Daniel James McGonagle, Dean G. Bostock, James John Foster, Kevin Gannon, Michael James Ercolini, Robert R. Gilman, Prince Lobel Tye LLP, Boston, MA, Anthony Michael Vecchione, Edward R. Nelson, III, Nelson Bumgardner PC, Ft. Worth, TX, for Plaintiffs. William J. McCabe, Matthew J. Moffa, Perkins Coie LLP, David J. Ball, Bracewell & Giuliani LLP, New York, NY, Michael E. Jones, Patrick Colbert Clutter, IV, Potter Minton, a Professional Corporation, Tyler, TX, Victoria Quyen Smith, Perkins Coie LLP, Palo Alto, CA, Douglas F. Stewart, Bracewell & Giuliani, Seattle, WA, Timothy R. Geiger, Bracewell LLP, Houston, TX, for Defendants.
Charles Craig Tadlock, Tadlock Law Firm, Plano, TX, Paul J. Hayes, Aaron Seth Jacobs, Daniel James McGonagle, Dean G. Bostock, James John Foster, Kevin Gannon, Michael James Ercolini, Robert R. Gilman, Prince Lobel Tye LLP, Boston, MA, Anthony Michael Vecchione, Edward R. Nelson, III, Nelson Bumgardner PC, Ft. Worth, TX, for Plaintiffs.
William J. McCabe, Matthew J. Moffa, Perkins Coie LLP, David J. Ball, Bracewell & Giuliani LLP, New York, NY, Michael E. Jones, Patrick Colbert Clutter, IV, Potter Minton, a Professional Corporation, Tyler, TX, Victoria Quyen Smith, Perkins Coie LLP, Palo Alto, CA, Douglas F. Stewart, Bracewell & Giuliani, Seattle, WA, Timothy R. Geiger, Bracewell LLP, Houston, TX, for Defendants.
MEMORANDUM OPINION AND ORDER
ROBERT W. SCHROEDER III, UNITED STATES DISTRICT JUDGE
Before the Court are Defendant ADP, LLC ("ADP") and Big Fish Games, Inc.'s ("Big Fish") (collectively, "ADP Defendants") Motions to Dismiss the Complaint for Failure to State a Claim (Docket Nos. 17 and 80, respectively) against Uniloc USA, Inc. and Uniloc Luxembourg, S.A.'s ("Uniloc"). Uniloc's case against Big Fish is consolidated with its case against ADP for pretrial purposes, with the exception of venue. Docket No. 25. The motions were originally filed while the cases were pending before Judge Gilstrap. On March 28, 2017, while ADP and Big Fish's motions were still pending before Judge Gilstrap, this Court ruled on several motions to dismiss in Lead Case No. 2:16–cv–393 ("AVG "). See Docket No. 129 in AVG (the "AVG Order").
Defendant Zendesk, Inc. was dismissed on August 11, 2017, and its motion to dismiss (Docket No. 70) was terminated on August 16, 2017. Defendants Blackboard, Inc. and Box, Inc. were dismissed on August 16, 2017, and their respective motions to dismiss (Docket Nos. 58 and 89) were also terminated on August 16, 2017.
"Docket No." refers to the docket in Lead Case No. 2:16–cv–741 unless otherwise indicated.
The AVG Order addressed claims 1, 2, 7, 15 and 22 of U.S. Patent No. 6,510,466 ("the '466 Patent") and claims 1, 3, 7, 9, 13 and 15 of U.S. Patent No. 6,728,766 ("the '766 Patent"). See Docket No. 129 in AVG at 2. Of those claims, the Court held that claims 1, 2 and 7 of the '466 Patent and claims 1 and 3 of the '766 Patent are drawn to ineligible subject matter. Id. at 20. The remaining claims the Court considered are means-plus-function claims. The Court held that the defendants had not sufficiently established that the means-plus-function claims are represented by the allegedly representative non-means-plus-function claims and accordingly declined to decide whether the means-plus-function claims are also directed to ineligible subject matter. Id. at 7.
After the ADP cases were reassigned to the undersigned (Docket No. 149), the Court ordered the parties in this case to file supplemental briefing on the effects of the AVG Order on the pending motions. Docket No. 160. Uniloc, ADP, and Big Fish each filed supplemental briefs (respectively, Docket Nos. 190, 174, and 180).
The claims Uniloc asserts against the ADP Defendants are not limited to the ones that it asserted against the defendants in AVG. Specifically, the claims asserted in this case but not asserted in AVG include claims 5, 11 and 17 of the '766 Patent and claims 3–5, 8, 9, 13, 16–20, 22–24, 28–33, 35–37, 41 and 42 of the '466 Patent. See Compl. against ADP, Docket No. 1; Am. Compl. against Big Fish, Docket No. 57; Uniloc Supp. Br., Docket No. 190 at 2. Uniloc also asserts against the ADP Defendants two additional patents, U.S. Patent Nos. 6,324,578 ("the '578 Patent") and 7,069,293 ("the '293 Patent"), that it did not assert against the defendants in AVG. Specifically, Uniloc asserts claims 1–8, 10–39, 41–46 of the '578 Patent, and claims 1, 12 and 17 of the '293 Patent. Docket No. 190 at 2.
Uniloc has also asserted infringement of the Asserted Patents in Lead Case No. 2:16–cv–862 against Defendants Netsuite, Inc. and Nutanix, Inc. Nutanix Inc. joins ADP's motion to dismiss (2:16–cv–862, Docket No. 39 at 2). Netsuite filed its own Motion to Dismiss the Amended Complaint for Failure to State a Claim (2:16–cv–862, Docket No. 25).
In its supplemental briefing, Uniloc does not include claim 22 of the '466 Patent and claim 12 of the '578 Patent in its chart of asserted claims against ADP. As Uniloc has not indicated to the Court that it intended to drop these two claims, the Court considers these two claims in this Order.
The '578 and '293 Patents are related to the '466 and '766 Patents, with the '578 and '766 Patents sharing a common specification and the '466 and '293 Patents also sharing a common specification.
"[T]he Asserted Patents are all part of a family of patents drawn toward addressing the inefficiencies in application management in client-server environment. Accordingly, they share similar specifications." Docket No. 64 at 5–6. "The '293 Patent is a divisional of the '466 Patent and shares its specification. The '578 Patent is a Parent to the '766 Patent and shares its specification. Further, each pair of Patents incorporates by reference the other pair's specification." Docket No. 174 at 2 n.3.
ADP Defendants challenge all claims of the four asserted patents, alleging that they are invalid under 35 U.S.C. § 101. Docket No. 17 at 6. For the reasons that follow, ADP's Motion is GRANTED–IN–PART and DENIED–IN–PART .
ADP and Big Fish's motions to dismiss for failure to state a valid claim are nearly identical with the exception that Big Fish's Motion does not address the '766 Patent, as Uniloc has not asserted infringement of this patent against Big Fish. See Am. Compl. against Big Fish, Docket No. 57. The Court primarily discusses and cites to ADP's motion (the "Motion," Docket No. 17).
I. BACKGROUND
The background of the '466 and '766 Patents is addressed in the AVG Order. See Docket No. 129 in AVG , at 2–4. Like the '466 and '766 Patents, the '578 and '293 Patents address aspects of application management in the client-server environment.The '578 Patent is directed to obtaining user and administrator sets of configuration preferences for applications and then executing the applications using both sets of obtained preferences. See '578 Patent, col. 3:40–45. Claim 1 of the '578 Patent provides:
1. A method for management of configurable application programs on a network comprising the steps of:
installing an application program having a plurality of configurable preferences and a plurality of authorized users on a server coupled to the network;
distributing an application launcher program associated with the application program to a client coupled to the network;
obtaining a user set of the plurality of configurable preferences associated with one of the plurality of authorized users executing the application launcher program;
obtaining an administrator set of the plurality of configurable preferences from an administrator; and
executing the application program using the obtained user set and the obtained administrator set of the plurality of configurable preferences responsive to a request from the one of the plurality of authorized users.
The '293 Patent describes distributing applications to on-demand servers from a centralized network management server. See '293 Patent at col. 50–53. For example, Claim 1 of the '293 Patent provides:
1. A method for distribution of application programs to a target on-demand server on a network comprising the following executed on a centralized network management server coupled to the network:
providing an application program to be distributed to the network management server;
specifying a source directory and a target directory for distribution of the application program;
preparing a file packet associated with the application program and including a segment configured to initiate registration operations for the application program at the target on-demand server; and
distributing the file packet to the target on-demand server to make the application program available for use by a user at a client.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6)
Under Federal Rule of Civil Procedure 12(b)(6), the Court must dismiss a complaint that does not state a claim for relief that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). To state a plausible claim, Plaintiffs must plead facts sufficient to allow the Court to draw a reasonable inference that Defendants are liable for the alleged patent infringement. See id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). At this stage, the Court accepts all well-pleaded facts as true and views those facts in the light most favorable to the Plaintiffs. Bustos v. Martini Club, Inc. , 599 F.3d 458, 461 (5th Cir. 2010).
Eligibility Under 35 U.S.C. § 101
In determining whether a claim is patent-ineligible, the Court must "first determine whether the claims at issue are directed to a patent-ineligible concept." Alice Corp. Pty. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014). Claims directed to software inventions do not automatically satisfy this first step of the inquiry. Enfish, LLC v. Microsoft Corp. , 822 F.3d 1327, 1335 (Fed. Cir. 2016). Rather, "the first step in the Alice inquiry ... asks whether the focus of the claims is on [a] specific asserted improvement in computer capabilities ... or, instead, on ... an ‘abstract idea’ for which computers are invoked merely as a tool." Id. at 1335–36.
If the Court determines that the claims are directed to an abstract idea, it then determines whether the claims contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. Alice , 134 S.Ct. at 2357. An inventive concept is "some element or combination of elements sufficient to ensure that the claim in practice amounts to ‘significantly more’ than a patent on an ineligible concept." DDR Holdings, LLC v. Hotels.com, L.P. , 773 F.3d 1245, 1255 (Fed. Cir. 2014). The Court "consider[s] the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application." Alice , 134 S.Ct. at 2355 (internal quotation omitted). Even if each claim element, by itself, was known in the art, "an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces." Bascom Global Internet Servs., Inc. v. AT & T Mobility LLC , 827 F.3d 1341, 1350 (Fed.Cir. 2016).
III. ANALYSIS
A. Asserted and Challenged Claims
ADP challenges all claims of the Asserted Patents, even though Uniloc has not alleged infringement of every claim of the Asserted Patents. Uniloc argues that it would be legally improper for the Court to invalidate unasserted claims. Docket No. 64 at 6 n.1 (citing 800 Adept, Inc. v. Murex Sec., Ltd. , 539 F.3d 1354, 1367 (Fed. Cir. 2008) ). ADP argues that its challenge to all claims in the four asserted patents is appropriate. Docket No. 88 at 9–10 (citing A Pty Ltd. v. eBay, Inc. , Case No. 1:15–cv–155–RP, 2015 WL 10990118 at *4 (W.D. Tex. Oct. 8, 2015) ). In the interest of judicial economy, the Court declines to consider arguments regarding unasserted claims at this time. Accordingly, to the extent ADP challenges any claim not asserted in this action, the Motion is DENIED without prejudice.
B. Representative Claims
In the AVG case, the Court denied the defendants' motion to dismiss as to claims 7, 9, 13, and 15 of the '766 Patent and claims 15 and 22 of the 466 Patent on the basis that defendants had failed to carry their burden of showing that these means-plus-function claims are similar in scope to or represented by the non-means-plus-function claims. Docket No. 129 in AVG , at 7.
Here, however, ADP asserts that claim 1 of each of the four asserted patents is representative of the remaining respective independent claims, and that the attendant dependent claims are representative of similar dependent claims. Docket No. 17 at 8–11. ADP argues that each of the following independent claims are system claims which recite "the limitations of claim 1 in a means-plus-function language": claims 17 and 31 of the '578 Patent, claim 15 of the '466 Patent, claim 12 of the '293 Patent, and claim 7 of the '766 Patent. Id. ADP further argues that each of the following independent claims recites "computer readable program means" for performing the functions of claim 1 of each Patent: claims 32 and 46 of the '578 Patent, claim 16 of the '466 Patent, claim 17 of the '293 Patent, and claim 13 of the '766 Patent. Id. As to the remaining independent claims 15 and 16 of the '578 Patent, ADP asserts that claim 15 is a method claim "which recites the features of claim 1 as executed at a client, not a server," and that claim 16 is "a combined server-client system which combines the limitations of claims 17 and 31." Id. at 8.
Uniloc does not refute or even acknowledge ADP's assertions of representativeness in its Opposition and instead argues only about claim 1 of each patent and the respective dependent claims. See Docket No. 64 at 13–14, 16–18, 20, 22–23. In fact, nowhere in its Opposition does Uniloc address or cite to any of the other claims. See id. Uniloc's Opposition treats the claims of each patent collectively, never indicating that an inventive concept might be found in a means-plus-function claim that is not also found in a non-means-plus-function claim. E.g. , Docket No. 64 at 27 ("For example, claims of the '466 Patent recite ..."); 29 ("Further, the claims of the '578 Patent recite ...").
Moreover, after the Court denied the motion to dismiss in AVG as to the means-plus-functions claims, the Court ordered the parties to submit supplemental briefing regarding the effects of the AVG Order on the instant motions. Docket No. 160 at 2. In its supplemental briefing, ADP reasserts that it has met its burden to show that the scope of the means-plus-function claims are sufficiently similar to the scope of the non-means-plus-function claims. Docket No. 174 at 3–4. ADP argues that it has demonstrated that the method claims are sufficiently representative of the means-plus-function claims "because the system[s] claims were ‘mirror’ images reciting ‘means for’ performing the exact method steps found in the representative claims." Id. (citing Motion, Docket No. 17 at 8–11). ADP also reasserts in its supplemental briefing that "where method claims are invalid under Section 101, corresponding system claims that contain only ‘minor differences in terminology but require performance of the same basic process’ are equally invalid." Id. (citing to Motion, Docket No. 17 at 18 (quoting Accenture Global Servs., GmbH v. Guidewire Software, Inc. , 728 F.3d 1336, 1344 (Fed. Cir. 2013) )).
In its supplemental brief, Uniloc again does not refute ADP's assertion of representativeness. Instead, Uniloc states that because "some of these [means-plus-function] claims are common to both sets of cases, Uniloc submits that it makes sense to deal with those claims at one time after the renewed motions are filed in the AVG cases." Id. at 2.
The Court is unpersuaded by Uniloc's decision to punt the issue of arguing the scope of means-plus-function claims until after the defendants in AVG have renewed their motions. Only three of the independent means-plus-function claims asserted in the AVG case overlap with the claims asserted against the ADP Defendants. Uniloc does not address the additional 11 independent claims that it asserts against the ADP Defendants but that it did not assert in AVG. See Docket Nos. 64 and 190.
For the reasons above, and having considered the parties' original and supplemental briefings, the Court finds that ADP has adequately shown that claim 1 of the '466 Patent, claim 1 of the '766 Patent, claim 1 of the '578 Patent, and claim 1 of the '293 Patent, and their dependent claims, are representative. See Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat. Ass'n , 776 F.3d 1343, 1348 (Fed. Cir. 2014) (where the Federal Circuit found that claim 1 of the asserted patents were representative because all of the claims were substantially similar and linked to the same abstract idea); see also Bilski v. Kappos , 561 U.S. 593, 612, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010).
Having now found the previously invalidated claim 1 of the '466 Patent and claim 1 of the '766 to be representative of the means-plus-function claims, the Court GRANTS ADP's Motion to Dismiss as to claims 15 and 22 of the '466 Patent and claims 7, 9, 13, and 15 of the '766 Patent for the reasons set forth in the AVG Order. See Docket No. 129 in AVG.
C. Need for Claim Construction
The parties disagree on whether claim construction is necessary to inform the Court's analysis as to patentability. Uniloc identifies a number of terms for which it argues claim construction is necessary including: "configurable preferences," see Docket No. 64. at 15–16, "an instance of the selected one of the plurality of the application programs," see id. at 18, "file packet" and "segment configured to initiate registration operations," see id. at 21, and "license management policy information," see id. at 23. Defendants argue that claim construction is not necessary and that, even under the definitions and constructions proposed by Uniloc, the constructions "merely specify particular data to be manipulated by its methods, or particular computer environments in which to apply those methods." Docket No. 88 at 5.
The Court invalidated claim 1 of the '466 Patent in the AVG Order and therefore need not consider the patentability of this term again. See Docket No. 129 in AVG. The Court notes, however, that Uniloc does not provide a proposed construction for "an instance of the selected one of the plurality of application programs," but instead only states that it "is important to clarify the general character of the patent ...." See Docket No. 64 at 18.
The Court also invalidated claim 1 of the '766 Patent in the AVG Order. See Docket No. 129 in AVG. Even if the Court was to accept Uniloc's proposed construction of "license management policy information," as setting "policies, such as the limit of the number of users, whether crossing the limit of users is allowed or not and how users are counted," Uniloc does not show how the construction would save its claim from being patent-ineligible. See Docket No. 103 at 7.
The Court issued a Claim Construction Memorandum and Opinion in this case on August 16, 2017 (Docket No. 233). However, the Court did not construe the terms that Uniloc identified above as needing construction. Even so, "claim construction is not an inviolable prerequisite to a validity determination under § 101." Bancorp Servs., LLC v. Sun Life Assur. Co. of Canada (U.S.) , 687 F.3d 1266, 1273–74 (Fed. Cir. 2012). As the Court discusses below, the Court does not require claim construction to determine the patent-eligibility of the Asserted Patents.
The Court next considers whether the remaining claims of each Asserted Patent are patent-eligible.
D. Alice Step 1
'578 Patent, Claim 1
ADP argues that the claims of the '578 Patent are directed to the abstract idea of providing two-tiered customization. Docket No. 17 at 14. ADP analogizes claim 1 of the '578 Patent to "conventional activity" among a supplier, a business and individual employees of the business. Id. at 9–10. ADP also analogizes the claims to non-computerized methods used by travel agencies or medical providers. Id. at 14–15. ADP argues that the claims merely couch conventional activity in computer-related terms, which cannot rescue the claims from abstraction. Id. at 16 (citing Device Enhancement LLC v. Amazon.com, Inc. , 189 F.Supp.3d 392 (D. Del. 2016) ). ADP provides the example of "configurable preferences," a claim term ADP describes as "so broad as to be no different than the conventional preferences by which conventional suppliers customize their services to increase consumer satisfaction." Id. at 16–17. ADP next argues that computerized preference management is an unpatentable abstract concept. Id. at 17 (citing Clear with Computers v. Altec Indus. , No. 6:14–cv–79, 2015 WL 993392, at *4 (E.D. Tex. Mar. 3, 2015) ).
Uniloc argues that "the Asserted Patents solve particular problems in the computer field, thus rendering them patent eligible." Docket No. 64 at 5 (citing Enfish LLC v. Microsoft Corp. , 822 F.3d 1327, 1336 (Fed. Cir. 2016) ). "The '578 Patent," Uniloc argues, "seeks to reduce costs and increase uniformity in managing software in a network environment by delivering configured applications when demanded by a user and provides ‘an essentially hardware transparent ability for an individual user to interface to an on-demand server supported client station while maintaining the user's personal preferences for each application program.’ " Id. at 8–9 (citing '578 Patent, col. 6:2–9). Uniloc states, "[t]he '578 Patent is directed to resolving that problem by claiming a method for management of configurable programs on a network." Id. at 9 (citing '578 Patent, col. 14:65–67). Specifically, "[a]n application launcher program associated with the application program is distributed to a client coupled to the network;" "[a] user set of the plurality of configurable preferences associated with one of the plurality of authorized users executing the application launcher program is obtained;" "an administrator set of the plurality of configurable preferences is obtained from an administrator;" and "[t]he application program is then executed using the obtained user set and the obtained administrator set of the plurality of configurable preferences responsive to a request from the one of the plurality of authorized users." Id. at 9 (citing '578 Patent, col. 15:1–13). The specification states that the claimed invention "provides for the desired reduced costs and increased uniformity in managing software in a network environment by delivering configured application when demanded by a user." Id. (citing '578 Patent, col. 6:2–5).
Uniloc also argues that ADP's supplier analogy is erroneous because the claimed client-server environment and other computer-related limitations render the claimed steps "clearly not tasks that can be completed by a supplier providing supplies to two employees of a business." Id. at 14–15. Uniloc states that the fact that the asserted claims cannot be performed by the human hand or in the human mind without specific hardware or circuitry "negates ADP's argument that the claims are simply an abstract idea." Id. at 15 (citing Genband US LLC v. Metaswitch Networks Ltd. , 211 F.Supp.3d 858, 906 (E.D. Tex. 2016), vacated and remanded on other grounds ). Uniloc also disputes ADP's construction of "configurable preferences," which Uniloc argues is inconsistent with the disclosure of the '578 specification. Id.
Turning first to "configurable preferences," the Court notes that despite the term's appearance on a list of terms that Uniloc identified as necessary for construction prior to a Section 101 analysis, see id. at 15–16 (citing Docket No. 34–1), the term does not appear on the parties' April 20, 2017 Joint Claim Construction and Prehearing Statement as a term requiring construction. See Docket No. 148. Nor did the Court construe the term "configurable preferences" in its Claim Construction Memorandum and Order. See Docket No. 233. Accordingly, "configurable preferences" takes its plain and ordinary meaning—any preferences pertaining to the claimed application program that may be configured.
The Court encourages parties to resolve disputes throughout the litigation, and the construction of "configurable preferences" may reflect one such successful resolution.
The claims of the '578 Patent involve computers but do nothing to improve their functionality. The claims employ off-the-shelf computer components without modification. See Elec. Power Grp. LLC v. Alstom S.A. , 830 F.3d 1350 1355 (Fed. Cir. 2016). The Court has already held that the kind of benefits they provide—"increased efficiency" or "reduced costs"—are not technological benefits. Docket No. 129 in AVG , at 11–12. As with the '466 Patent, the claims of the '578 are overly vague in that they recite "executing the application program using the obtained user set and the obtained administrator set [of preferences]," e.g. , '578 Patent, col. 15:10–12, without claiming any "particular way of programming or designing the software" to facilitate execution of the program according to the claim. See id. at 11 (citing Apple, Inc. v. Ameranth, Inc. , 842 F.3d 1229, 1241 (Fed. Cir. 2016) ).
ADP's assertion that the '578 Patent claims are directed to "two-tiered customization" is well supported in the claims. The focus of claim 1 is obtaining user and administrator sets of configuration preferences and then executing an application using those preferences. The application launcher, which the specification teaches may be as simple as an icon that provides a URL, see '578 Patent, col. 8:6–20, is not the central focus of the claims; rather, it is a generic means by which the claims execute applications in light of two sets of preferences. Accordingly, the Court finds that the claims of the '578 Patent are directed to the abstract idea of "providing two-tiered customization" in a client-server environment.
'293 Patent, Claim 1
ADP argues that the claims of the '293 Patent are directed to the abstract idea of "providing on-demand distribution of information." Docket No. 17 at 21. ADP analogizes claim 1 of the '293 Patent to a library implementing an inter-library loan system using a central repository. Id. at 22–23. In ADP's analogy, the claimed servers are like libraries, and the source and target directories are like shelves. Id. (citing Clear with Computers , 2015 WL 993392, at *4 ). Moreover, ADP argues, "specifying source and destination directories is a conventional and necessary step for receiving or storing any file over a network, and therefore contributes no weight in the abstract idea analysis." Id. at 23 (citing NexusCard, Inc. v. Kroger Co. , 173 F.Supp.3d 462, 467 (E.D. Tex. 2016) ). As with the '578 Patent, ADP alleges that the claims of the '293 Patent merely "wrap [ ] conventional practices in generic computer terminology." Id. at 23.
Uniloc argues that the "computer problem" solved by the '293 Patent was "the limited capabilities associated with centralized management of software." Docket No. 64 at 9. Uniloc states that the '293 Patent addresses that problem by providing "a uniform framework for deployment of new or updated application programs from different software designers." Id. (quoting '293 Patent, col. 3:32–34). Uniloc again disputes ADP's analogy on the grounds that the computer-related limitations of the claims render it not abstract. Id. at 20–21. Specifically, Uniloc puts great weight on the claimed "segment configured to initiate registration operations," which it states should be construed to "include[ ] ‘an import data file and a call to an import program executing on a target station.’ " Id. at 21 (quoting '293 Patent, col. 5:45–48).
The claims of the '293 Patent also fail to improve the functioning of a computer. They provide for off-the-shelf components, with claim 2 even specifying Tivoli™, a commercially-available brand, as limiting the "network management server" in claim 1. '293 Patent, col. 21:38–39. The Court agrees with the ADP Defendants that the allegedly "uniform framework" provided by the '293 Patent includes only generic activities of servers. Docket No. 17 at 23. Even under Uniloc's proposed construction of "segment configured to initiate registration operations," the claim still does not amount to more than a routine activity of commercial network management software as described by the specification itself, and is therefore directed to an abstract idea. See '293 Patent, col. 17:20–54 (describing the TME 10™ network management software).
ADP's assertion of the alleged abstract idea as "providing on-demand distribution of information" is not a perfect fit for the claims, which use an on-demand server but do not distribute the software "on-demand" in the sense of the distribution being responsive to a request from a user. Rather, the claims are directed to the centralized distribution of software to a plurality of on-demand servers from a central network management server. See Docket No. 64 at 9. Thus, the Court finds that a better characterization of the abstract idea is "centralized distribution of software."
An abstract idea can be described in different ways, and the Court describing the idea differently from ADP is not fatal to its motion. See Docket No. 129 in AVG at 11 (citing Ameranth , 842 F.3d at 1240 ).
In sum, the claims of the Asserted Patents are directed to abstract ideas. Because step one of the Alice inquiry is satisfied, the Court proceeds to step two.
The Court does not revisit its finding that the claims of the '466 and '766 Patents are directed to abstract concepts. See Docket No. 129 in AVG , at 12. The Court addresses the remaining claims of the '466 and '766 Patents at step two of the Alice inquiry.
E. Alice Step Two
Having concluded that claim 1 of the '578 Patent and '293 Patent are drawn to abstract ideas, the next step is to determine whether the claims contain meaningful limitations that create an inventive concept. Alice , 134 S.Ct. at 2359. The Court also considers whether the remaining claims of the '466 and '766 Patents create an inventive concept.
Defendants generally argue that none of the claims of the Asserted Patents provide an inventive concept because they recite generic computer equipment like "networks," "clients," "servers," and "remote workstations" for exchanging generic information. Docket No. 17 at 27. Likewise, Defendants contend that the claimed steps of "install[ing]," "distribut[ing]," and "executing" programs over a network are "standard computer functionality undertaken in any client-server system." Id. Defendants characterize limitations like "obtaining preferences" and "preparing a ‘file packet’ " as basic computer tasks that correspond to conventional information management steps, and which are not activities unique to computer hardware. Id. at 28. Defendants assert that any ordered combinations of these claim elements also fail because even the claims that recite specific methods for performing computer tasks implement the above-listed abstract ideas in generic server-client environments. Id.
Defendants distinguish the Asserted Patents, which they claim do not provide a unique solution to a technical problem unique in the computer field, from the patents in DDR Holdings which were found to provide a unique solution "rooted in computer technology" to retain visitors to a website, and from the patent in Enfish , which improved computer software functionality itself through use of a "self-referential table." Id. at 30–31 (citing DDR Holdings , 773 F.3d 1245 ; Enfish , 822 F.3d 1327 ). Defendants state that the Asserted Patents, instead, "centralize operations in order to offer two-tiered customization services and centrally-distributed products, to distribute information on-demand, and to manage permissions," each of which is an abstract concept, reflective of conventional solutions known outside the computer arts, and which provide the same benefits of "reduced costs" and "increased uniformity" provided by conventional centralization. Id. at 31–32.
Uniloc responds that Defendants ignore that "[t]he ‘inventive concept’ may arise in one or more of the individual claim limitations or in the ordered combination of the limitations" and "[t]he inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art." Docket No. 64 at 27 (citing Bascom , 827 F.3d at 1350 ).
Uniloc asserts that the Court should reject Defendants' argument that the Asserted Patents recite generic computer equipment because these terms have specific meanings within the context of application management in a client-server environment. Id. at 32–34 (citing Genband US LLC , 211 F.Supp.3d at 904–05 (finding that the claims were patent-eligible, despite the claim relying on generic IP protocols and devices, because the recited components and operations were meaningless outside the context of a computer network that uses those specific protocols and devices)). Uniloc argues, for example, that the term "application program" is defined in the patent as referring "to the code associated with the underlying program functions, for example Lotus Notes or a terminal emulator program." Id. Uniloc argues as another example that "application program launcher distributed to populate the user desktop may only include a URL and an associated ICON and, possibly, code to allow obtaining a user identification and password information." Id.
Moreover, Uniloc contends that the Asserted Patents and claimed inventions amount to inventive concepts because they "resolve longstanding problems in the industry of network management." Docket No. 64 at 30–31 (citing DDR Holdings , 773 F.3d at 1258 ). Uniloc asserts that the claimed inventions are "specifically tailored to solve discrete problems that existed at the time." Id. at 32 (citing Bascom , 827 F.3d 1341 ).
In their reply, Defendants argue that Genband does not apply in this case because there, "the claimed operations were ‘meaningless outside the context of a computer network,’ while Uniloc's methods are just as advantageous when applied outside computer environments." Docket No. 88 at 14. Defendants further distinguish that in Bascom , "the ‘ordered combination’ of the claimed generic components (a client computer, a remote server, computer networks, and filtering software) held an inventive step because it provided more dynamic and efficient filtering than the combinations of those elements known in the networking arts." Docket No. 88 at 9. Defendants argue that, here, "the order of Uniloc's claim steps results in wholly predictable improvements, because they reflect the conventional steps taken for centralized distribution of products and information." Id. Defendants also claim that Uniloc's reliance on DDR Holdings is incorrect because Uniloc's patents apply well-known methods for distributing products and information not specific to the internet or computers, whereas the technology in DDR Holdings "overrode the ‘routine and conventional sequence of events’ that would otherwise occur on the internet. Id. (citing DDR Holdings , 773 F.3d at 1258 ).
The Asserted Patents here do not provide for a unique solution rooted in computer technology. See DDR Holdings , 773 F.3d 1245. Nor do the claimed inventions improve computer software functionality itself, see Enfish , 822 F.3d at 1339, or are specifically tailored to solve discrete problems that existed at the time, see Bascom , 827 F.3d at 1350. Defendants have met their burden of showing that the claims of the Asserted Patents recite routine computer functions for exchanging information using generic off-the-shelf computer components, see Elec. Power. Grp. , 830 F.3d at 1355, which are just as advantageous when applied outside of the computer environment, see Genband , 211 F.Supp.3d at 904–05. Though the Asserted Patents are all part of the same family of patents and share similar specifications, see Docket No. 174 at 2 n.3, the Court explains below why each of the remaining claims of the Asserted Patents specifically does not create an inventive concept and is drawn to ineligible subject matter.
The '466 Patent
Uniloc argues that the '466 Patent"addresses the problem of seamless integration of application access across heterogeneous networks, and, to that end, provides application programs on-demand from a server to a user logging in to a client supported by the server." Docket 64 at 31. According to Uniloc, the individual claim limitations of claim 1 of the '466 Patent"allows for an instance of an application program to be provided to the client in response to a selection of the application program for which a user is authorized," which "allows for instances of the programs to be provided to the client as needed for execution." Id. at 28. Uniloc states that "a customized user interface desktop is provided at the client, which displays the applications the user is authorized to access." Id.
The Court has already explained why the individual limitations of claim 1 of the '466 patent, separately or in ordered combination, fail to provide an inventive concept. Docket No. 129 in AVG , at 14. In AVG , the Court credited the specifications as listing purported advantages of the claimed invention but found that Uniloc had not shown how these advantages constituted inventive concepts in themselves. Id. This Court also found that, unlike the claims in Bascom , the claims of the '466 Patent relied only upon generic computer components used in a routine arrangement. Id. at 15. The Court further determined that the '466 Patent claims shared more of the characteristics with the invalid claims in Ultramercial, Inc. v. Hulu, LLC , 772 F.3d 709 (Fed. Cir. 2014) than with the valid claims in DDR Holdings because the "display regions" operated in a conventional manner. Id. The human performance example of distributing software by hand also showed that a preexisting analog exists to the claimed invention of distributing software in a client-server network environment. Id.
Though Uniloc asserts in its complaints (Docket Nos. 1, 57) dependent claims 3, 4, 5, 8, 9 and 13 of the '466 Patent against the ADP Defendants, Uniloc does not identify in its response, and the Court cannot find, any limiting language that could result in any of the elements of these claims, or any combination thereof, amounting to more than an inventive concept. To the contrary, ADP Defendants have met their burden of showing that each of the dependent claims either recites conventional computer activity (see claim 3, "distributing application launcher programs" and "receiving the selection," and claim 9, "determining" license availability), recites generic instruction to maintain and use a certain kind of information (see claim 4, "maintaining configurable user preference," claim 5, specifying that the user preference information are configured and updated by the user or administrator, and claim 8, including "the step of configuring the user desktop interface not to include display regions... for which the user is not authorized"), or constitutes electronic recordkeeping (see claim 13, "logging information"). See Docket No. 17 at 20–21, 27–29.
The Court therefore finds that the additionally asserted dependent claims of the '466 Patent, taken individually or as an ordered combination, do not provide for an inventive concept and are drawn to ineligible subject matter.
The '766 Patent
Uniloc next argues that the '766 Patent provides for an inventive concept because "[d]etermining license availability for a selected application program for a user allows the user to move between different client stations when accessing the application program." Docket No. 64 at 28–29. Uniloc states that "[m]obility is one of the issues identified in the patent that the art at the time struggled with." Id.
The Court has already explained that independent claim 1 and dependent claim 7 of the '766 Patent do not provide an inventive concept because the claims recite generic electronic recordkeeping functions of maintaining, querying and relaying information. See Docket 129 in AVG , at 18–19.
Uniloc asserts the additional dependent claim 5 of the '766 Patent against ADP, and again, Uniloc does not identify, and the Court cannot find, any limiting language in claim 5 that could transform the claims of the '766 Patent into an inventive concept. ADP has met its burden of showing that claim 5, which limits claim 1 "wherein [sic] at least one of a user identify based policy, an administrator policy override definition or a user policy override definition defines a policy for managing at least one of a response time or a usage rate," merely adds that the license policy can be associated with a group when performing the electronic recordkeeping function of maintaining this information at a license management server. '766 Patent, col. 15:37–22:40; see also Docket No. 17 at 25–26. Accordingly, claim 5 does not contain an inventive concept and is drawn towards patent-ineligible subject matter.
It appears from Uniloc's supplemental briefing that the only non-means-plus-function claim of the '766 Patent it asserts against ADP that it did not assert against defendants in AVG , and that has not been invalidated thus far, is claim 5. Docket No. 190 at 2.
The '578 Patent
Uniloc argues that the individual limitations of claim 1 of the '578 Patent, or the ordered combination of these limitations, provide for discrete inventive concepts because the claims "provide[ ] for management of configurable application programs in a network environment from a central on-demand server location while allowing for user preferences to be tracked independent of the hardware location of the user." Docket No. 64 at 29. According to Uniloc, the inventive concept of the '578 Patent lies in "enabling sharing of a storage device between computers or use of separate but synchronized databases of preferences values at the computer," providing an unconventional technological solution to the technological problem of "roaming users within a heterogeneous computer network." Docket No. 103 at 3–4. Uniloc asserts that these limitations "also provide for reduced costs and increased uniformity in managing software in a network environment by delivering configured applications when demanded by a user." Id.
Defendants argue that, like the other Asserted Patents, the '578 Patent couches conventional techniques in computer-specific terms. Docket No. 17 at 16. Defendants claim that claim 1 of the '578 Patent recites language, like "installing" applications on servers and clients and "exchang[ing] data," which are generic computer tasks. Id. As discussed above, Defendants analogize that the claimed methods offer the same central management of multiple preferences that exist in business practices, such as making procurement requests. Docket No. 17 at 15, 29.
Uniloc argues in its sur-reply that the language of the '578 limitations "inherently requires performance on a computer," and therefore is not a function that could be performed by a librarian. Docket No. 103 at 4.
As the Federal Circuit stated in Enfish , "fundamental economic and conventional business practices are often found to be abstract ideas, even if performed on a computer." 822 F.3d at 1335. The Court finds that the individual limitations of claim 1 of the '578 Patent do not provide an inventive concept. Each limitation of claim 1 relies upon generic computer components used in a routine arrangement. See Bascom , 827 F.3d at 1346 ; see also Docket No. 17 at 27. The first step of claim 1, "installing an application program having a plurality of configurable preferences and a plurality of authorized users on a server coupled to a network" recites standard computer functionality between client-server systems. '578 Patent, col. 14:63–67. The second step of "distributing the application launcher program" to a client on the network also recites a generic computer function. '578 Patent, col. 15:1–3; see also Alice , 134 S.Ct. at 2358. The third and fourth steps of "obtaining" the configurable preferences from the users and administrators recite generic electronic recordkeeping functions of querying and relaying information. '578 Patent, col. 15:4–9; see also Alice , 134 S.Ct. at 2359. Nothing in the claim or specification indicates how the information is obtained. Moreover, the Federal Circuit has held that "merely selecting information, by content or source, for collection, analysis, and display does nothing significant to differentiate a process from ordinary mental processes." Elec. Power Grp. , 830 F.3d at 1355. The fifth step of the claim, "executing the application program" using the obtained information from the administrator and user, is also a generic function without claiming any "particular way of programming or designing the software" to facilitate execution of the program according to the claim, and "merely claim[s] the resulting systems." '578 Patent, col. 15:10–13; Apple, Inc. v. Ameranth, Inc. , 842 F.3d 1229, 1241 (Fed. Cir. 2016).
Moreover, as discussed above and in the Court's AVG Order, the benefits of reducing costs or increasing uniformity or efficiency claimed by the '578 Patent are not technological benefits or improvements to a computer's functionality. Docket No. 129 in AVG , at 11–12.
Finally, as with the '466 and '766 Patents, Uniloc does not identify any limiting language to suggest that an inventive concept could exist as to dependent claims 2–8, and 10–14. See Docket No. 64. Defendants, on the other hand, argue that these claims only specify where the configurable preferences come from (claims 2, 3, 10), where the preferences are stored (claim 6), where the command to execute the application program comes from (claims 4, 5, 7), whether to obtain default preferences (claim 8), and whether multiple user sets and application programs may be used (claims 11–14). See Docket No. 17 at 17–18. The Court agrees that these claims, individually and in any ordered combination, recite conventional practices in generic computer technology, similar to the '766 Patent.
The '578 and '766 Patents share a common specification.
Accordingly, the Defendants have met their burden of showing that the claims of the '578 Patent do not provide an inventive concept and are drawn to ineligible subject matter.
The '293 Patent
Uniloc claims that the individual limitations of claim 1 of the '293 Patent, or the ordered combination of these limitations contribute to the inventive concept of "enhancing installation and registration of application programs on computers of the network" to solve the technological problem of "limited capabilities associated with centralized management of software distribution." Docket No. 103 at 4.
In addition to arguing that the Asserted Patents recite generic computer equipment and functions, and therefore do not provide for an inventive concept, see supra p. 15–16, Defendants assert that the claimed methods of the '293 Patent are digital analogs to indexing and distributing physical media, such as books. Docket No. 17 at 29. ADP Defendants analogize that the "file packets" and "directories" of the claims perform the same functions as analog cards and shelves, and that the claimed methods are "no more efficient or effective at distributing information than their classical analogs[sic], save for the inherent speed of digital communication." Id. at 29.
In its sur-reply, Uniloc argues that the '293 Patent specifications teaches that the limitations of the '239 claims includes programmed instructions for processing specific data, which can only be performed by a computer, and is not performable by a librarian. Docket No. 103 at 3–4.
The Court agrees with Defendants that claim 1 of the '293 Patent does not provide for an inventive concept, similar to the '466 Patent. The first step of claim 1 "provid[es] an application program to be distributed to the network management server," which recites a generic computer function that existed at the time of the invention, and which is to be performed on a brand-name server. '239 Patent, col. 21:26–27; see also '239 Patent, col. 7:26–27 ("Tivoli™ server provides a means for software distribution and management in computer network system."). The second step of the claim which "specif[ies] a source directory and a target directory" for distribution of the application program amounts to electronic recordkeeping. '239 Patent, col. 21:29–30; see also Uniloc USA, Inc. v. E–MDS, Inc. , 6:14–CV–00625–RWS, 2015 WL 10791906, at *4, 6 (E.D. Tex. Aug. 19, 2015). The third and fourth steps of "preparing a file packet associated with the application program and including a segment configured to initiate registration operations for the application program at the target on-demand server" and distributing this file packet to the target on-demand server also recite generic computer functions of indexing and distributing a program. '239 Patent, col. 21:31–37; see also Alice , 134 S.Ct. at 2358.
The '293 and '466 Patents share a common specification.
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Defendants have adequately shown that claim 1 of the '293 Patent recites generic computer components, and provides for functions that are merely digital analogs to indexing and distributing data. Accordingly, claim 1 of the '293 Patent does not provide an inventive concept and is drawn to ineligible subject matter.
IV. CONCLUSION
Defendants have shown that claims 3–5, 8, 9, 13, 15–20, 22–24, 28–33, 35–37, 41 and 42 of the '466 Patent, claims 5, 7, 9, 11, 13, 15 and 17 of the '766 Patent, claims 1–8, 10–39 and 41–46 of the '578, and claims 1, 12 and 17 of the '293 Patent are drawn to ineligible subject matter and, therefore, invalid. Accordingly, the Motion to Dismiss (Docket No. 17) is GRANTED as to those claims. The Motion is DENIED as to any unasserted patent claims. The Motion is DENIED AS MOOT as to Defendants' motion to dismiss the claims for infringement of the '293 Patent for failure to plead sufficient factual allegations.
Defendant Big Fish's Motion (Docket No. 80) is also GRANTED–IN–PART and DENIED–IN–PART consistent with this Order.
It is therefore ORDERED that all claims asserted by Uniloc against Defendants in these actions (2:16–cv–741; 2:16–cv–858) are DISMISSED WITH PREJUDICE .
Any motions remaining in these cases are DENIED AS MOOT.
The Clerk of the Court is directed to close these cases.