United States District Court, D. Delaware
E. Moore, Bindu A. Palapura, Stephanie E. O'Byrne, POTTER
ANDERSON & CORROON LLP, Wilmington, DE.
M. Desmarais, Jon T. Hohenthaner, Karim Z. Oussayef, Laurie
N. Stempler, Robert C. Harrits, DESMARAIS LLP, New York, NY
Attorneys for Plaintiff International Business Machines
G. Day, Andrew C. Mayo, ASHBY & GEDDES, Wilmington, DE.
David Hadden, Saina S. Shamilov, Phillip J. Haack, Adam M.
Lewin, FENWICK & WEST LLP, Mountain View, CA Attorneys
for Defendant Groupon, Inc.
U.S. DISTRICT JUDGE.
International Business Machines Corporation
(“IBM”) filed suit against Defendant Groupon,
Inc. (“Groupon”), alleging infringement of U.S.
Patent Nos. 5, 796, 967; 7, 072, 849; 5, 961, 601; and 7,
before the Court is Groupon's motion for judgment on the
pleadings that the '967 and '849 patents
(collectively, the “Filepp patents”) are directed
to ineligible subject matter and are invalid under 35 U.S.C.
§ 101. (D.I. 29) The parties submitted briefing
(see D.I. 30, 37, 39) and the Court heard oral
argument on June 5, 2017. (See D.I. 100
(“Tr.”)) On September 15, 2017, the Court
requested supplemental briefing in light of the Federal
Circuit's recent decision, Visual Memory LLC v.
NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017). The
parties submitted letter briefing on September 19, 2017 (D.I.
167) and September 20, 2017 (D.I. 168). They also provided
their views on another Federal Circuit opinion, Two-Way
Media Ltd. v. Comcast Cable Commc'ns, LLC, __F.3d
__, 2017 WL 4931936 (Fed. Cir. Nov. 1, 2017), on November 10
(D.I. 192) and November 14 (D.I. 194).
Filepp patents are related patents directed to
“generating screen displays for interactive
applications (such as for making travel reservations or
shopping) with integrated advertisements and commands to
navigate within and between the applications.” (D.I. 30
at 2-3) The '967 patent is titled “Method for
Presenting Applications in an Interactive Service” and
the '849 patent is titled “Method for Presenting
Advertising in an Interactive Service.” (Id.)
asserts that the Filepp patents are invalid under § 101
because they are “directed to the abstract ideas of
local storage of information and resources at a user's
computer and for using such information and resources in
presenting a partitioned display, ” without the
addition of an inventive concept. (Id. at 1, 8)
(internal quotation marks omitted) Groupon bases its motion
on the Court's adoption of Magistrate Judge Burke's
Report and Recommendation denying a similar motion in related
case IBM v. Priceline. In that case, the
defendants argued that the Filepp patents and two
others were directed to patent-ineligible subject matter
pursuant to § 101. (IBM v. Priceline, C.A. No.
15-137-LPS-CJB D.I. 60 (“Priceline R&R”),
D.I. 73 (“Priceline Order”)) In the February 16,
2016 Priceline R&R, Judge Burke agreed with the
defendants that the claims were directed to abstract ideas
under Alice step one, finding that “the
concepts of locally storing information and resources at a
user's computer and presenting a partitioned display are
abstractions ‘devoid of a concrete or tangible
application.'” (Priceline R&R at 48) However,
Judge Burke recommended the Court deny the motion without
prejudice under Alice step two because
“[c]laim construction and discovery should further
illuminate whether the claims' limitations are specific
enough to be an inventive concept.” (Id. at
49) On March 30, 2016, the Court adopted the Priceline
R&R and denied the motion to dismiss without prejudice,
agreeing that “issues of claim construction . . . must
be briefed and resolved before Defendants should be permitted
to file a renewed motion under 35 U.S.C. § 101.”
(Priceline Order at 2-3)
that claim construction has been completed, Groupon renews
the Priceline argument, asserting that the Filepp
patents, even when construed, are “void of any
inventive concept necessary to transform their recited
abstract ideas into a patent-eligible application.”
(D.I. 30 at 6) IBM contends that the law has changed since
the Priceline decision, and under Enfish LLC v.
Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) and its
progeny, the Filepp patents are patent-eligible under
Alice step one because they are directed toward
improvements in computer functionality. (D.I. 37 at 6-8)
Motion for Judgment on the Pleadings
to Federal Rule of Civil Procedure 12(c), a party may move
for judgment on the pleadings “[a]fter pleadings are
closed - but early enough not to delay trial.” When
evaluating a motion for judgment on the pleadings, the Court
must accept all factual allegations in a complaint as true
and view them in the light most favorable to the non-moving
party. See Rosenau v. Unifund Corp., 539 F.3d 218,
221 (3d Cir. 2008); see also Maio v. Aetna, Inc.,
221 F.3d 472, 482 (3d Cir. 2000). This is the same standard
that applies to a Rule 12(b)(6) motion to dismiss. See
Turbe v. Gov't of Virgin Islands, 938 F.2d 427, 428
(3d Cir. 1991).
12(c) motion will not be granted “unless the movant
clearly establishes that no material issue of fact remains to
be resolved and that he is entitled to judgment as a matter
of law.” Rosenau, 539 F.3d at 221. “The
purpose of judgment on the pleadings is to dispose of claims
where the material facts are undisputed and judgment can be
entered on the competing pleadings and exhibits thereto, and
documents incorporated by reference.” Venetec
Int'l, Inc. v. Nexus Med., LLC, 541 F.Supp.2d 612,
617 (D. Del. 2008); see also In re Burlington Coat
Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)
(explaining that any documents integral to pleadings may be
considered in connection with Rule 12(c) motion). “The
issue is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support
the claims.” Burlington Coat Factory, 114 F.3d
at 1420. Thus, a court may grant a motion for judgment on the
pleadings (like 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, 221 F.3d at 482 (3d Cir. 2000).
Court may consider matters of public record as well as
authentic documents upon which the complaint is based if
attached to the complaint or as an exhibit to the motion.
See Oshiver v. Levin, Fishbein, Sedran & Berman,
38 F.3d 1380, 1384 n.2 (3d Cir. 1994). The Court may also
take judicial notice of the factual record of a prior
proceeding. See Oneida Motor Freight, Inc. v. United
Jersey Bank, 848 F.2d 414, 416 n.3 (3d Cir. 1988).
Ultimately, a motion for judgment on the pleadings can be
granted “only if no relief could be afforded under any
set of facts that could be proved.” Turbe, 938
F.2d at 428.
Patent-Eligible Subject Matter
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, subject to the
conditions and requirements of this title.” 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). Pertinent 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. CLS Bank
Int'l, 134 S.Ct. 2347, 2355 (2014) (internal
quotation marks omitted). “As early as Le Roy v.
Tatham, 55 U.S. 156, 175 (1852), the Supreme Court
explained that ‘[a] principle, in the abstract, is a
fundamental truth; an original cause; ...