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Sonos Inc. v. D&M Holdings Inc.

United States District Court, D. Delaware

March 13, 2017

SONOS, INC., Plaintiff,
v.
D&M HOLDINGS INC. d/b/a THE D GROUP, D&M HOLDINGS U.S. INC., and DENON ELECTRONICS USA, LLC, Defendants.

          Memorandum Opinion Phillip A. Rovner, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE; Jonathan A. Choa, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE; George I. Lee, Esq., LEE SULLIVAN SHEA & SMITH, LLP, Chicago, IL; Sean M. Sullivan, Esq., LEE SULLIVAN SHEA & SMITH, LLP, Chicago, IL; Rory P. Shea, Esq. (argued), LEE SULLIVAN SHEA & SMITH, LLP, Chicago, IL; J. Dan Smith, Esq., LEE SULLIVAN SHEA & SMITH, LLP, Chicago, IL; Michael P. Boyea, Esq., LEE SULLIVAN SHEA & SMITIH, LLP, Chicago, IL. Attorneys for Plaintiff

          Jack B. Blumenfeld, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmingtpn, DE; Michael J. Flynn, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DJE; John M. Jackson, Esq. (argued), JACKSON WALKER LLP, Dallas, TX; Nathaniel (Nate) S. Clair II, Esq., JACKSON WALKER LLP, Dallas, TX; Matthew C. Acosta, Esq., JACKSON WALKER LLP, Dallas, TX; Blake T. Dietrich, Esq., JACKSON WALKER LLP, Dallas, TX; David olsom, Esq., JACKSON WALKER LLP, Texarkana, TX. Attorneys for Defendant

          ORDER

          ANDREWS, U.S. DISTRICT JUDGE:

         Presently before the Court is Defendants' Partial Motion for Judgment on the Pleadings for Lack of Patent-Eligible Subject Matter. (D.I. 116). The issues have been fully briefed. (D.I. 117, 119, 124). The Court held oral argument on November 14, 2016. (D.I. 206) ("Hr'g;Tr."). For the reasons that follow, the Court will deny Defendants' motion.

         I. BACKGROUND

         Plaintiff filed this patent infringement lawsuit against Defendant on October 14, 2014. (D.I.I). Plaintiff has asserted a total of twelve patents in this suit. (D.I. 102). Defendants have moved for partial judgment on the pleadings with respect to four of the asserted patents, Alleging that the patents are directed to ineligible subject matter. (D.I. 117). The patents at issue }n this motion are U.S. Patent Nos. 8, 588, 949 ("the '949 patent"), 7, 571, 014 ("the '014 patent"), 9, 202, 509 ("the '509 patent"), and 9, 219, 959 ("the '959 patent").

         The parties refer to the '949 and '014 patents collectively as the Volume patents. The '949 patent is directed to a multimedia controller and method for adjusting volume levels in a multi-zone system through the use of a user interface. The summary of the invention section of the specification describes the invention as follows:

In general, the present invention pertains to controlling a plurality of multimedia players, or simply players, in groups. According to one aspect of the present invention, a mechanism is provided to allow a user to group some of the players according to a theme or scene, where each of the players is located in a zone. When the scene is activated, the players in the scene react in a synchronized manner.

('949 patent at 2:28-34). The '014 patent is similarly directed to a method and apparatus for controlling multimedia players in a multi-zone system. The invention is described in the specification as follows:

In general, the present invention pertains to control of audio characteristics of a plurality of multimedia players, or simply players, from a controller. The characteristics include, but are not limited to, an audio source and an audio volume being played in each of the players. In particular, the present invention enables the user to remotely control the audio characteristics of the players either as a group or as an individual player.

('014 patent at 2:24-31).

         The parties refer to the '509 and '959 patents collectively as the Pairing patents. The '509 patent is directed to methods for grouping and pairing networked audio players. The specification describes the invention as follows:

In general, the present invention pertains to controlling a plurality of multimedia players, or simply players, in groups. . . . [I]ndividual players may be paired or grouped to stimulate [sic] a multi-channel listening environment. In [sic] instead of grouping selected players to play back an audio item, a user is allowed to activate one of the players to process the data of the audio item, essentially separating the data into individual streams, each of the streams representing a single-sound track and being played back in one of the players, thus creating a multi-channel listening environment with the selected players.

('509 patent at 2:26-27, 2:59-67). The '959 patent is similarly directed to devices and methods for grouping, consolidating, and pairing networked audio players. The invention is described in the specification as follows:

In brief summary, the embodiments described herein provide technology for grouping, consolidating, and pairing individual playback devices to create of enhance a multi-channel listening environment. Particularly, the embodiments described herein enable two or more playback devices to be paired, such that multichannel audio is achieved or enhanced. Such embodiments may be used to produce stereo sound or other audio environments suitable for audio content encoded with more than two channels, such as for certain kinds of television, movies, and music.

('959 patent at 2:54-63).

         II. LEGAL STANDARD

         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 Banklnt'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 in '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 £357 (alterations in original) (quoting Mayo, 132 S.Ct. at 1297). "[S]imply appending conventional steps, specified at a high level of generality, to .. . abstract ideas cannot make those ... ideas patentable." Mayo, 132 S.Ct. at 1300. Further, "the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of [the idea] to a particular technological environment." Alice, 134 S.Ct. at 2358 (quoting Bilski v. Kappos, 561 U.S. 593, 610-11 (2010)). 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), cert, denied, 135 S.Ct. 2907 (2015).

         Patent eligibility under § 101 is a question of law suitable for resolution on a motion for judgment on the pleadings. Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288[ 1293 (Fed. Cir. 2016). The Federal Circuit follows regional circuit law for motions for judgment on the pleadings. Id. Under Third Circuit law, a Rule 12(c) motion for judgment on the pleadings is reviewed under the same standard as a Rule 12(b)(6) motion to dismiss when the Rule ¶ 2(c) motion alleges that the plaintiff failed to state a claim upon which relief can be granted. Revell v. PortAuth., 598 F.3d 128, 134 (3d Cir. 2010); Turbe v. Gov't of the Virgin Islands, 938 F.2d 427, 428 (3d Cir. 1991). The court must accept the factual allegations in the complaint and take them in the light most favorable to the non-moving party. Erickson v. Pardus, 551 U.S. 89, 94 (2007); Christopher v. Harbury, 536 U.S. 403, 406 (2002).

         The Federal Circuit has held that the district court is not required 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.3|i 1343, l 1348 (Fed. Cir. 2014) (internal quotation marks omitted).

         III. ...


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