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Yodlee, Inc. v. Plaid Technologies Inc.

United States District Court, D. Delaware

January 27, 2017

YODLEE, INC., Plaintiff,



         1. This is a patent infringement case. On December 1, 2014, plaintiff Yodlee, Inc. ("Yodlee") filed a complaint alleging infringement of U.S. Patent Nos. 6, 199, 077 (the "'077 patent"), 6, 317, 783 (the '"783 patent"), 6, 510, 451 (the '"451 patent"), 7, 263, 548 (the '"548 patent"), 7, 424, 520 (the '"520 patent"), 7, 752, 535 (the "'535 patent"), and 8, 266, 515 (the '"515 patent").

         2. On January 23, 2015, defendant Plaid Technologies, Inc. ("Plaid") moved to dismiss under Federal Rule of Civil Procedure ("Rule(s")) 12(b)(6). (D.I. 11) Plaid contends that all of the asserted claims are directed to patent-ineligible subject matter. Plaid's motion to dismiss was referred to United States Magistrate Judge Christopher J. Burke for a report and recommendation. (See generally D.I. 7)

         3. On May 23, 2016, Judge Burke issued a 65-page Report and Recommendation, concluding that Plaid's motion to dismiss should be granted in part and denied in part. (See D.I. 185 ("R&R")) The parties filed their objections to the R&R on June 9, 2016 (see D.I. 198, 199), and their responses on June 27, 2016 (see D.I. 210, 211).

         4. On October 12, 2016, Plaid filed a motion for summary judgment. (D.I. 264) Among other requested relief, Plaid seeks judgment of patent ineligibility with respect to all asserted claims of the seven patents in suit. (See D.I. 265 at 3-18)[1]

         5. Evaluating a motion to dismiss under Rule 12(b)(6) requires the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir. 2004). The Court may grant such a motion to dismiss only if, after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." Maio v. Aetna, Inc., 221 F.3d 472, 482 (3d Cir. 2000) (internal quotation marks omitted).

         6. Summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Rule 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986).

         7. Pursuant to 35 U.S.C. § 101, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor." There are three exceptions to § 101's broad patent-eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). Relevant here is the third category, "abstract ideas, " which "embodies the longstanding rule that an idea of itself is not patentable." Alice Corp. Pty. Ltd. v. CLSBank Int'l, 134 S.Ct. 2347, 2355 (2014) (internal quotation marks omitted). In Mayo Collaborative Services v, Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), the Supreme Court set out a two-step "framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Alice, 134 S.Ct. at 2355. First, courts must determine if the claims at issue are directed at a patent-ineligible concept - in this case, an abstract idea ("step 1"). See Id. If so, the next step is to look for an "'inventive concept' - i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself ("step 2"). Id. The two steps are "plainly related" and "involve overlapping scrutiny of the content of the claims." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016).

         8. The Court has carefully reviewed the R&R and all relevant filings and has evaluated Plaid's motion to dismiss de novo. See Masimo Corp. v. Philips Elec. N. Am. Corp., 62 F.Supp.3d 368, 379 (D. Del. 2014); 28 U.S.C. § 636(b)(1); Rule 72(b)(3). For the reasons given in Judge Burke's detailed § 101 analysis and further explained below, IT IS HEREBY ORDERED THAT:

(a) both parties' objections to the R&R (see D.I. 198, 199) are OVERRULED;
(b) the R&R (D.I. 185) is ADOPTED in full; and
(c) Plaid's motion to dismiss (D.I. 11) is GRANTED in part and DENIED in part.

         9. Plaid's motion for summary judgment as it relates to ineligibility (D.I. 264; see D.I. 265 at 3-18) is GRANTED in part, DENIED in part, and DENIED AS MOOT in part.

         10. As an initial matter, the Court is unpersuaded by Plaid's argument that Judge Burke incorrectly interpreted and applied Enfish, LLC v. Microsoft Corporation,822 F.3d 1327 (Fed. Cir. 2016). (See generally D.I. 199 at 5-12) The Court does not read the R&R to "require every important aspect of the claim to be captured in the asserted abstract idea, " as Plaid suggests. (D.I. 199 at 5 (internal quotation marks omitted)) Rather, Judge Burke's analysis properly considered, for example, "the key concept in the claim" and the "rationale for the invention" underlying the '783 patent. (R&R at 27 (emphasis added)) An invention's underlying motivation (as incorporated by and expressed in the claim language) ...

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