United States District Court, D. Delaware
PALTALK HOLDINGS, INC. Plaintiff,
RIOT GAMES, INC. Defendant.
Wilmington this 15th day of May, 2017, having
reviewed the papers submitted in connection with
defendant's motion to dismiss (D.I. 9), the court issues
its decision as follows:
Holdings, Inc. ("plaintiff") is the owner of U.S.
Patent Nos. 5, 822, 523 ("the '523 patent") and
6, 226, 686 ("the '686 patent) (collectively
"the patents-in-suit"). (D.I. 1 at¶¶6-7)
The patents-in-suit relate to distribution of messages
between computers in interactive environments, such as online
gaming. (D.I. 1 at ¶¶ 11-14) Riot Games, Inc.
("defendant") publishes video games such as League
of Legends, which is a multiplayer online video game. (D.I. 1
at ¶ 22) On December 16, 2016, plaintiff filed an action
against defendant, alleging that defendant directly infringes
the patents-in-suit. (D.I. 1) Defendant moved to dismiss for
failure to state a claim for relief under Federal Rules of
Civil Procedure 12(b)(6). (D.I. 9) The court has jurisdiction
pursuant to 28 U.S.C. §§ 1331 and 1338(a).
Standard of Review.
motion filed under Federal Rule of Civil Procedure 12(b)(6)
tests the sufficiency of a complaint's factual
allegations. BellAtl. Corp. v. Twombly, 550 U.S.
544, 555 (2007); Kost v. Kozakiewicz, 1 F.3d 176,
183 (3d Cir. 1993). A complaint must contain "a short
and plain statement of the claim showing that the pleader is
entitled to relief, in order to give the defendant fair
notice of what the . . . claim is and the grounds upon which
it rests." Twombly, 550 U.S. at 545 (internal
quotation marks omitted) (interpreting Fed.R.Civ.P. 8(a)).
Consistent with the Supreme Court's rulings in
Twombly and Ashcroft v. Iqbal, 556 U.S. 662
(2009), the Third Circuit requires a three-part analysis when
reviewing a Rule 12(b)(6) motion. Connelly v. Lane Const.
Corp., 809 F.3d 780, 787 (3d. Cir. 2016). In the first
step, the court "must tak[e] note of the elements a
plaintiff must plead to state a claim." Next, the court
"should identify allegations that, because they are no
more than conclusions, are not entitled to the assumption of
truth." Lastly, "[w]hen there are well-pleaded
factual allegations, a court should assume their veracity and
then determine whether they plausibly give rise to an
entitlement for relief." Id. (citations
Under Twombly and Iqbal, the complaint must
sufficiently show that the pleader has a plausible claim.
McDermott v. Clondalkin Grp., 2016 WL 2893844, at *3
(3d Cir. May 18, 2016). Although "an exposition of [the]
legal argument" is unnecessary, Skinner v.
Switzer, 562 U.S. 521 (2011), a complaint should provide
reasonable notice under the circumstances. Id. at
530. A filed pleading must be "to the best of the
person's knowledge, information, and belief, formed after
an inquiry reasonable under the circumstances, " such
that "the factual contents have evidentiary support, or
if so identified, will likely have evidentiary support after
a reasonable opportunity for further investigation or
discovery." Anderson v. Bd. of Sch. Directors of
Millcreek Twp. Sch. Dist, 574 F.App'x 169, 174 (3d
Cir. 2014) (quoting Fed.R.Civ.P. 11(b)). So long as
plaintiffs do not use "boilerplate and conclusory
allegations" and "accompany their legal theory with
factual allegations that make their theoretically viable
claim plausible, " the Third Circuit has held
"pleading upon information and belief [to be]
permissible where it can be shown that the requisite factual
information is peculiarly within the defendant's
knowledge or control." McDermott, 2016 WL
2893844, at *4 (quotation marks, citation, and emphasis
part of the analysis, a court must accept all well-pleaded
factual allegations in the complaint as true, and view them
in the light most favorable to the plaintiff. See
Erickson v. Pardus, 551 U.S. 89, 94 (2007);
Christopher v. Harbury, 536 U.S. 403, 406 (2002);
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231
(3d Cir. 2008). In this regard, a court may consider the
pleadings, public record, orders, exhibits attached to the
complaint, and documents incorporated into the complaint by
reference. Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007); Oshiver v. Levin,
Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 n.2
(3d Cir. 1994). The court's analysis is a
context-specific task requiring the court "to draw on
its judicial experience and common sense."
Iqbal, 556 U.S. at 663-64.
§ 101. Defendant argues that dismissal is appropriate,
"because the asserted patents do not claim patent
eligible subject matter under 35 U.S.C. § 101."
(D.I. 10 at 1) The Patent Act extends patent protection to
"any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement
thereof. . . subject to the conditions and requirements of
this title." 35 U.S.C. §101. Despite the
protections of § 101, the Supreme Court has held that,
"[e]xcluded from such protection are laws of nature,
natural phenomena, and abstract ideas." Diamond v.
Diehr, 450 U.S. 175, 185 (1981). The purpose of these
exceptions is to protect the "basic tools of scientific
and technological work." Mayo Collaborative Servs.
v. Prometheus Labs., Inc., ___ U.S. ___, 132 S.Ct. 1289,
1293 (2012). In Alice, the Supreme Court endorsed 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 Corp. Pty. Ltd. v. CLS Bank
Int'l, ___U.S. ___, 134 S.Ct. 2347, 2355 (2014).
First, the court must determine if the claims at issue are
directed to a patent-ineligible concept. Id. If the
answer is no, that ends the matter and the defendant's
motion is denied. See, e.g., Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) (finding in
step one that the claims were not directed to an abstract
idea and, therefore, not addressing step two). If, however,
the answer is yes, then the court must "determine
whether the additional elements transform the nature of the
claim into a patent-eligible application."
Alice, 134 S.Ct. at 2355.
Alice, Step One.
"[T]he 'directed to' inquiry applies a stage-one
filter to claims, considered in light of the specification,
based on whether 'their character as a whole is directed
to excluded subject matter.'" Enfish, 822
F.3d at 1335 (citing Internet Patents Corp. v. Active
Network, Inc., 790 F.3d 1343, 1346
(Fed.Cir.2015)). While the Supreme Court "has
not established a definitive rule to determine what
constitutes an 'abstract idea' ....[, it is]
sufficient to compare claims at issue to those claims already
found to be directed to an abstract idea in previous
cases." Id. at 1334. Defendant argues that
claim 1 of the '523 patent and claim 7 of the '686
patent are "substantially identical" and are
representative of all the claims in the patents-in-suit,
because claims 1 and 7 are directed to "the abstract
idea of group communication that uses an agent to aggregate
those communications for delivery, " and "the
remaining claims are directed to this same abstract idea
under Alice step 1." (D.I. 10 at 5-6, 18)
Defendant contends that claims 1 and 7 are similar to claim 1
of U.S. Patent No. 6, 073, 142 ("the '142
patent"), which was found to be invalid under §
(D.I. 17 at 2-3, citing Intellectual Ventures I
LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016))
Meanwhile, plaintiff cites Enfish and argues that
the patents-in-suit are not directed to an abstract idea and,
instead, "claim a specific improvement directed to
solving a critical problem in the prior art that specifically
arises in shared, networked, interactive computer
applications such as online games." (D.I. 16 at 11
(citing '523 Patent, 2:47-3:22))
of the '523 patent recites:
A method for providing group messages to a plurality of host
computers connected over a unicast wide area communication
network, comprising the steps of:
providing a group messaging server coupled to said network,
said server communicating with said plurality of host
computers using said unicast network and maintaining a list
of message groups, each ...