United States District Court, D. Delaware
Brian E. Farnan, Esq., FARNAN LLP, Wilmington, DE; Andrew G. Heinz, Esq. (argued), DESMARAIS LLP, New York, NY., Attorneys for Plaintiff Tuxis Technologies, LLC.
Steven J. Balick, Esq., ASHBY & GEDDES, Wilmington, DE; William H. Baumgartner, Jr., Esq. (argued), SIDLEY AUSTIN, LLP, Chicago, IL. Attorneys for Defendant Amazon.com, Inc.
RICHARD G. ANDREWS, District Judge.
Presently before the Court is Amazon's Motion to Dismiss for Failure to State a Claim. (D.I. 10). The motion has been fully briefed (D.I. 11, 12 & 14), and oral argument was held on May 23, 2014. (D.I. 21). Amazon's Motion to Dismiss was granted with regard to claim 1 of the '513 patent on September 3, 2014. (D.I. 23). Familiarity with the Court's prior opinion (D.1. 22) is presumed. The parties submitted additional briefing on the remaining asserted claims (D.1. 25, 26 & 27), and notices of subsequent authority. (D.I. 28, 29 & 30). For the reasons that follow, Amazon's Motion to Dismiss is granted with respect to all of the asserted claims of the '513 patent.
Tuxis has identified 100 claims of the '513 patent as asserted, out of a total of 267 claims. (D.I. 25 at 3 n.1). In its supplemental briefing, Tuxis specifically cites claims 47, 140, and 259 to support its argument in opposition of Amazon's Motion to Dismiss. Therefore, I focus my analysis on the claims Tuxis relied upon in its briefing.
Section 101 of the Patent Act defines patent-eligible subject matter. It provides: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101. The Supreme Court has recognized an implicit exception for three categories of subject matter not eligible for patentability-laws of nature, natural phenomena, and abstract ideas. Alice Corp. Pty. v. CLS Bank Int'l, 134 S.Ct. 2347, 2354 (2014). The purpose of these carve outs is to protect the "basic tools of scientific and technological work." Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1293 (2012). "[A] process is not unpatentable simply because it contains a law of nature or a mathematical algorithm" as "an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection." Id. at 1293-94 (internal quotation marks and emphasis omitted). In order "to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words apply it.'" Id. at 1294 (emphasis omitted).
The Supreme Court recently reaffirmed the framework laid out in Mayo "for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Alice, 134 S.Ct. at 2355. First, the court must determine whether the claims are drawn to a patent-ineligible concept. Id. If the answer is yes, the court must look to "the elements of the claim both individually and as an ordered combination'" to see if there is an "inventive concept'- i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'" Id. (alteration in original). "A claim that recites an abstract idea must include additional features' to ensure that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]." Id. at 2357 (internal quotation marks omitted). Further, "the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of [the idea] to a particular technological environment." Id. at 2358 (quoting Bilski v. Kappas, 561 U.S. 593, 610 (2010) (internal quotation marks omitted)). Thus, "the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention." Id. For this second step, the machine-or-transformation test can be a "useful clue, " although it is not determinative. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014).
"Whether a claim is drawn to patent-eligible subject matter under§ 101 is an issue of law, " and "is a matter of both claim construction and statutory construction." In re Bilski, 545 F.3d 943, 951 (Fed. Cir. 2008), aff'd sub nom. Bilski v. Kappas, 561 U.S. 593 (2010). "Claim construction is a question of law...." In re Nuijten, 500 F.3d 1346, 1352 (Fed. Cir. 2007). At the motion to dismiss stage, any proposed claim constructions of the non-moving party should be accepted.
The Federal Circuit has held that it is not required for a district court to individually address claims not asserted or identified by the non-moving party, so long as the court identifies a representative claim and "all the claims are substantially similar and linked to the same abstract idea." Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1348 (Fed. Cir. 2014) (internal quotation marks omitted).
In applying the two-step framework outlined in Alice, it is clear that all of the asserted claims of the '513 patent are drawn to patent-ineligible subject matter. The claims are directed to the abstract idea of "upselling, " which is a longstanding commercial practice. While limitations narrow the scope of the claims, these limitations do not amount to ...