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TriPlay Inc. v. Whatsapp Inc.

United States District Court, D. Delaware

November 20, 2017

TRIPLAY, INC., Plaintiff,
v.
WHATSAPP INC., Defendant.

          REPORT AND RECOMMENDATION

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE.

         Presently pending before the Court is Defendant WhatsApp Inc.'s ("Defendant" or "WhatsApp") motion to dismiss Plaintiff TriPlay, Inc.'s ("Plaintiff or "TriPlay") Third Amended Complaint ("TAC") for failure to state a claim, filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (the "Motion"). (D.I. 120) Defendant argues that the claims of Plaintiffs United States Patent Nos. 8, 332, 475 (the "'475 patent") and 8, 874, 677 (the "*677 patent, " and together with the '475 patent, the "Asserted Patents")[1] are directed to non-patent-eligible subject matter under 35 U.S.C. § 101 ("Section 101"). (D.I. 121 at 1) For the reasons that follow, the Court recommends that Defendant's Motion be DENIED.

         I. BACKGROUND[2]

         A. Asserted Patents

         The two Asserted Patents are both entitled "Messaging System and Method[;]" they relate to the electronic messaging field, and, "in particular, to cross-platform messaging." ('475 patent, col. 1:5-6; '677 patent, col. 1:5-6)[3] The patents share identical specifications. (D.I. 93 at 2 n.2)[4]

         At the time of patenting, the "versatility of contemporary electronic messaging services [wa]s growing and giving rise to new message formats and new devices with messaging capabilities." ('475 patent, col. 1:10-12) The specification lists examples of "[e]merging message formats" such as "MMS (Multimedia Message Service)" that complemented "traditional messaging services (e.g., e-mail, Short Message Service, instant messaging, etc.)." (Id., col. 1:12-16) The adoption of these new messaging capabilities sometimes resulted in a situation where communication devices supported "different and not always compatible message and communication formats." (Id., col. 1:16-19) The specification described this as "[t]he problem of cross-platform messaging[.]" (Id., col. 1:20)

         The inventions were designed to address this problem. They provide for, inter alia, a system for "message communication via a communication media between one or more originating communication devices assigned to a sender and one or more destination communication devices assigned to a receiver[.]" (Id., col. 5:22-26) The specification describes the system as comprising an "access block" and a "media block[.]" (Id., col. 5:27-36) The patents further set forth various systems and methods that generally involve adapting or converting the layout and/or format of a message based on criteria relating to the capabilities of the destination device or to the communication media being transferred. (See, e.g., id., cols. 5:22-45, 6:36-59, 7:1-19, 7:30-53) The '677 patent varies from the '475 patent, inter alia, in that its claims explicitly recite an "initial message includ[ing] a video[, ]" and conversion of that video. (See, e.g., '677 patent, col. 23:23-51)

         The specification depicts a generalized flow chart of the messaging system's operation. ('475 patent, FIG. 6) The system is set in motion when Subscriber A sends an electronic message to Subscriber B and Non-Subscriber C. (Id., col. 16:46-49) Prior to delivery of the message, it is rerouted to the claimed messaging system. (Id., col. 16:49-51) Upon receipt of the message, the messaging system identifies the message's originating and destination devices, and analyzes these devices' message layout and format capabilities. (Id., col. 16:51-65) The system then makes a delivery decision as to instructions for the format and/or layout of the message to be delivered. (Id., col. 16:56-65) Pursuant to these instructions, the message will then be converted such that its format will be transcoded and/or its layout will be adapted in accordance with the capabilities of the destination devices. (Id., col. 17:6-8) At this point, any necessary repackaging of the message will also occur, which can include replacing some of the media items contained in the message with links. (Id., col. 17:8-12) The converted message is then delivered to the destination devices, and the messaging system registers this transaction. (Id., col. 17:13-20)

         B. Procedural History

         1. The District Court Case

         The Court, in resolving Defendant's previous motion to dismiss the claims of the '475 patent as ineligible for patent protection under Section 101, (the "1st Section 101 R&R"), granted that motion as to claim 12 of the '475 patent. (D.I. 52 at 40; D.I. 72 at 2) With respect to claim 1, however, the Court concluded that claim construction was necessary to determine whether the claim was directed to patent-eligible subject matter. (D.I. 52 at 39-40; D.I. 72 at 3) The Court only addressed claims 1 and 12 in that opinion, finding that Defendant had not then carried its burden to demonstrate why any additional claims of the patents should be dismissed. (D.I. 52 at 13) Subsequent to that ruling, Plaintiff added claims for infringement of the '677 patent to the case. (D.I. 46, 80)

         Chief Judge Leonard P. Stark referred to the Court all issues of claim construction and any renewed motions to dismiss that were to be filed in the future, (D.I. 86), and stayed discovery in the case (which had not yet begun) until the resolution of the instant Motion, (D.I. 82). Accordingly, the parties engaged in claim construction with respect to terms bearing on the patentability of the '475 and '677 patents. (D.I. 93, 96, 100, 103) After a Markman hearing, (D.I. 105), the Court issued a Report and Recommendation regarding the disputed claim terms (the "Claim Construction R&R"), (D.I. 108). Chief Judge Stark subsequently overruled objections to the Claim Construction R&R and adopted it in its entirety. (D.I. 118)

         On December 15, 2016, Defendant filed the instant Motion, (D.I. 120), and briefing was completed on January 23, 2017, (D.I. 124). The Court heard oral argument on the Motion on October 11, 2017. (D.I. 142 (hereinafter, "Tr.")) Following that argument, Defendant filed two Notices of Supplemental Authority regarding recently-issued decisions from the United States Court of Appeals for the Federal Circuit. (D.I. 141, 143)

         2. The IPRs and Their Relationship to the District Court Case

         Additionally, on February 14, 2015, Defendant filed a petition for inter partes review ("IPR") of certain claims (1, 6, 9, 12, 17, 18, 23, 28, 37 and 39-42) of the '475 patent. (See D.I. 117 at 1; D.I. 128 at 2) The United States Patent and Trademark Office's Patent Trial and Appeal Board ("PTAB") instituted IPR on each of the asserted grounds, and on August 17, 2016, ultimately issued a Final Written Decision holding all instituted claims invalid in light of certain priorart. (D.I. 117 at 1; D.I. 128 at 2) Plaintiff did not appeal that decision. (D.I. 128 at2)

         On March 6, 2016, Defendant filed IPR petitions with respect to 21 claims of the '677 patent, and the PTAB instituted IPR for 12 of those 21 claims. (D.I. 128 at 2) On August 28, 2017, the PTAB issued Final Written Decisions upholding the validity of all challenged claims of the '677 patent. (D.I. 136, exs. A & B at 9) Defendant has filed appeals of the PTAB's rulings with respect to the '677 patent with the Federal Circuit. (See D.I. 139 at 2 & n.4)

         II. STANDARD OF REVIEW

         A. Standard of Review Regarding a Rule 12(b)(6) Motion that Challenges Patent Eligibility Pursuant to Section 101

         Pursuant to Rule 12(b)(6), a party may move to dismiss the plaintiffs complaint based on the failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The sufficiency of pleadings for non-fraud cases is governed by Federal Rule of Civil Procedure 8, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Fed.R.Civ.P. 8(a)(2). In order to survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). In assessing the plausibility of a claim, the court must "construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (internal quotation marks and citation omitted).

         Here though, this Rule 12(b)(6) Motion is used to assert an affirmative defense-that the patents are subject matter ineligible under Section 101. In that scenario, dismissal is permitted only if the well-pleaded factual allegations in the Complaint, construed in the light most favorable to the plaintiff, suffice to establish the defense.[5] See Jones v. Bock, 549 U.S. 199, 215 (2007); Bristol-Myers Squibb Co. v. Merck & Co., Inc., Civil Action No. 15-560-GMS, 2016 WL 1072841, at *1 n.1 (D. Del. Mar. 17, 2016); Genetic Techs. Ltd. v. Agilent Techs., Inc., 24 F.Supp.3d 922, 927 (N.D. Cal. 2014).

         Patentability under Section 101 is a question of law. In re Bilski, 545 F.3d 943, 951 (Fed. Cir. 2008), qff'd, Bilski v. Kappos, 561 U.S. 593 (2010). Yet this question of law is also one that "may be informed by subsidiary factual issues." CyberFone Sys., LLC v. Cellco P 'ship, 885 F.Supp.2d 710, 715 (D. Del. 2012) (citing In re Comiskey, 554 F.3d 967, 976 (Fed. Cir. 2009)). There has been some uncertainty regarding the appropriate standard of proof in Section 101 cases, specifically as to whether a "clear and convincing" standard of proof applies. See Intellectual Ventures I LLC v. Symantec Corp., 100 F.Supp.3d 371, 379-80 (D. Del. 2015) (citing cases), aff'd in part, rev'd in part, 838 F.3d 1307 (Fed. Cir. 2016). However, assuming that the "clear and convincing" standard of proof applies to Section 101 challenges (as the Court does here), see Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1342 (Fed. Cir. 2013) ("[A]ny attack on an issued patent based on a challenge to the eligibility of the subject matter must be proven by clear and convincing evidence.") (internal quotation marks and citation omitted), vacated sub nom. WildTangent, Inc. v. Ultramercial, LLC, 134 S.Ct. 2870 (2014), it applies only to the resolution of factual disputes, and not to resolution of pure issues of law, see MAZ Encryption Techs. LLC v. Blackberry Corp., C.A. No. 13-304-LPS, 2016 WL 5661981, at *4 (D. Del. Sept. 29, 2016); TriPlay, Inc. v. WhatsApp Inc., Civil Action No. 13-1703-LPS, 2015 WL 1927696, at *5 (D. Del. Apr. 28, 2015) (citing cases), adopted in all substantive respects, 2015 WL 4730907 (D. Del. Aug. 10, 2015). And as to the instant Motion, which was filed at the pleading stage (a stage at which any facts of record that are clearly in dispute are to be construed in the light most favorable to the plaintiff), the "clear and convincing" standard of proof should not come into play at all. See Blue Spike, LLC v. Google Inc., Case No. 14-cv-01650-YGR, 2015 WL 5260506, at *4 (N.D. Cal. Sept. 8, 2015); Shortridge v. Found. Constr. Payroll Serv., LLC, Case No. 14-cv-04850-JCS, 2015 WL 1739256, at *7 (N.D. Cal. Apr. 14, 2015); Modern Telecom Sys. LLC v. Earthlink, Inc., No. SA CV 14-0347-DOC, 2015 WL 1239992, at *7-8 (CD. Cal. Mar. 17, 2015); cf. Modern Telecom Sys. LLC v. Lenovo (United States) Inc., Case No.: SA CV 14-1266-DOC (JEMx), 2015 WL 7776873, at *5 (CD. Cal. Dec. 2, 2015).[6]

         B. Assessing Patentable Subject Matter

         Patent-eligible subject matter is defined in Section 101 of the Patent Act:

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. In choosing such expansive terms "modified by the comprehensive 'any, ' Congress plainly contemplated that the patent laws would be given wide scope." Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980).

         Yet while the scope of Section 101 is broad, there is an "important implicit exception [to it]: [l]aws of nature, natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347, 2354 (2014) (internal quotation marks and citation omitted); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1293 (2012). "Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, [because] they are the basic tools of scientific and technological work." Prometheus, 132 S.Ct. at 1293 (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).

         The Supreme Court of the United States has also recognized, however, that "too broad an interpretation of this exclusionary principle could eviscerate patent law." Id.; see also Alice, 134 S.Ct. at 2354. This is because "all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Prometheus, 132 S.Ct. at 1293; see also Alice, 134 S.Ct. at 2354. To that end, it has explained that "an application of a law of nature, [natural phenomena or abstract idea] to a known structure or process may well be deserving of patent protection." Diamond v. Diehr, 450 U.S. 175, 187 (1981) (emphasis in original).

         In Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347 (2014), the Supreme Court provided the framework for assessing whether a patent contains eligible subject matter under Section 101. Under this now familiar two-part test, courts "must first determine whether the claims at issue are directed to a patent-ineligible concept, " such as an abstract idea. Alice, 134 S.Ct. at 2355. If so, the courts must then determine "[w]hat else is there in the claims" by considering "the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements 'transform the nature of the claim' into a patent-eligible application." Id. (internal quotation marks and citation omitted). The Supreme Court describes this second part of the test as a search 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." Id. (internal quotation marks and citation omitted).

         C. Considerations Relevant to Deciding a Rule 12 Motion that Challenges the Eligibility of Multiple Patent Claims, Based on the Analysis of a Single Representative Claim

         In Cronos Techs., LLC v. Expedia, Inc., C.A. No. 13-1538-LPS, 2015 WL 5234040 (D. Del. Sept. 8, 2015), Chief Judge Stark noted "several considerations relevant to deciding a Rule 12 motion that challenges the patent eligibility of multiple patent claims based on analysis of a single representative claim." 2015 WL 5234040, at *2. The District Court set out these considerations as follows:

First, are all non-representative claims adequately represented by the representative claim (i.e., do all of the challenged claims relate to the same abstract idea and do any of the non-representative claims add one or more inventive concepts that would result in patent eligibility)?[] Second, are there issues of claim construction that must be decided before resolving the motion? Finally, is there any set of facts that could be proven relating to preemption, [] questions of patentability, [] or whether the claims "solve a technological problem, " [] that would result in a determination that one [] or more of the claims are patent-eligible?

Id. (citations and footnotes omitted) (emphasis in original); see also Yodlee, Inc. v. Plaid Techs. Inc., Civil Action No. 14-1445-LPS, 2016 WL 2982503, at *3 (D. Del. May 23, 2016).

         III. DISCUSSION

         For purposes of the Court's Section 101 analysis, the parties have agreed upon representative claims from the two patents, and have agreed on which other claims are properly associated with those representative claims. (D.I. 84 at 2-3)[7] And in arguing that the representative claims of the '475 and '677 patents are patent-eligible, Plaintiff focuses on three elements of the claimed invention that are found in various claims. Plaintiff refers to these elements as: (1) the "access block/media block messaging system solution"; (2) the "message template solution"; and (3) the "video delivery/clickable icon solution." (See, e.g., D.I. 122 at 7) For ease of reference, the Court sets out below a chart of the four representative claims currently at issue in Defendant's Motion (two from each patent), the relevant claims associated therewith, and the purported "technical solutions" (or "elements") that Plaintiff asserts are incorporated within each set of claims.[8]

Representative Claim

Claims Associated with Representative Claims

Purported Technical Solutions Incorporated Within Claim Set

'4 7 5 patent, claim 1

2, 3, 4, 5

access block/media block messaging system element

'475 patent, claim 8

7, 8, 19, 20, 29, 30, 36

access block/media block messaging system element and/or message template element

'677 patent, claim 15

1, 2, 6, 7, 11, 13, 15, 16, 17, 20 and 21

access block/media block messaging system element plus video delivery/clickable icon element

'677 patent, claim 9

3, 4, 5, 8, 9, 10, 12, 18 and 19

access block/media block messaging system element plus video delivery/clickable icon element plus message template element

         (D.I. 122 at 7; Plaintiffs Oral Argument Presentation, Slide 16; D.I. 140)

         The Court will first provide brief overviews of these three elements. Next, the Court will set out the legal framework for its inquiries at step one and step two of the Alice test. Lastly, the Court will turn to the parties' arguments with respect to the patent eligibility of the '475 and '677 patents.

         A. Key Elements of '475 and '677 Patents

         1. Access Block/Media Block Messaging System Element

         The access block/media block messaging system element of Plaintiff s invention is recited in all representative claims in the patents at issue here (i.e., representative claims 1 and 8 of the '475 patent, and representative claims 9 and 15 of the '677 patent). The specification explains that the claimed intermediary messaging system is made up of an "access block" configured to receive a message from a sender having initial layout and format characteristics, and to transit the message to a receiver, and a "media block" that is operatively coupled to the access block, and that is configured to adapt the initial layout and/or format characteristics of the message to a layout and/or format that is compatible with the receiver's device. ('475 patent, col. 5:22-45; see also FIG. 2) These features of the invention are computers that are configured in a particular way so as to carry out the invention. (Id., cols. 9:64-10:3, 11:64-12:3, 23:10, 17) In short, the "access block" is responsible for receiving and sending the message, and the "media block" is responsible for selecting a message format and layout that will be compatible with the recipient's device, and for converting the message accordingly.

         2. Message Template Element

         The message template element of Plaintiffs invention is recited in representative claim 8 of the '475 patent, as well as representative claim 9 of the '677 patent. (See, e.g., D.I. 122 at 7) The specification explains that the claimed messaging system and/or client may be configured to provide a subscriber with a pre-defined template for composing messages, which may be personalized pursuant to the subscriber's preferences. ('475 patent, cols. 19:49-51, 20:45-48) Such templates can vary in type (e.g., general, greeting-like, interactive message, e-mail or text) and will have different corresponding content structures. (Id., col. 19:51-57 & Table 1) Each type of template and/or each template has a "unique identifier" capable of being recognized by the messaging system and/or client and stored in the metadata of the message. (Id., col. 19:49-57) For template-based messaging, the media block is configured to convert the initial layout of the message in accordance with the recognized unique identifier and the display capabilities of the receiver's device. (Id., cols. 6:4-12; 21:1-5)

         3. Video Delivery/Clickable Icon Element

         The video delivery/clickable icon element of Plaintiff s invention is recited in representative claims 9 and 15 of the '677 patent, which are directed to receiving, converting and forwarding messages that include a video. (See, e.g., D.I. 122 at 7) The specification of the '677 patent explains that the message manager component of the media block may choose to repackage a message based on the capabilities of the destination device, such as available bandwidth. ('677 patent, col. 16:27-32) To that end, the message manager may choose to send a converted message as one entity or as multiple entities to be reassembled upon receipt. (Id., col. 10:55-56) The specification indicates that when a message contains a media item such as a video, and delivery or successful downloading of the video would be hindered in some way (by, for example, bandwidth), the media manager may choose to replace the video with a corresponding link. (Id., cols. 10:55-58, 16:64-17:3)

         While the specification discusses replacing a media item in a converted message, the claims of the '677 patent recite converting a message including a video into a message with a clickable icon based on the video. (See, e.g., id., col. 24:13-24) During claim construction, the Court construed the term "clickable icon" in these claims to mean a "visual representation that is clickable." (Claim Construction R&R at 37) In doing so, it rejected Plaintiffs arguments that: (1) the "providing ... a clickable icon" term in the claims of the '677 patent is limited only to providing "a link to a data file or program"; and (2) the clickable icon must, in all instances, replace the video item in a message. (Id. at 34-37 (internal quotation marks omitted))

         B. The Alice Test

         The Court next sets out the legal requirements as to both steps of the Alice inquiry.

         1. Alice Step One

         Under step one of Alice, the claims are considered in their entirety to ascertain not simply whether they involve a patent-ineligible concept, but whether '"their character as a whole is directed to excluded subject matter'" (here, an abstract idea). Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)).[9] Courts look to whether the claims "focus on a specific means or method[, ...] or are instead directed to a result or effect that itself is the abstract idea[.]" McRo, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016). "The 'abstract ideas' category embodies 'the longstanding rule that [a]n idea of itself is not patentable.'" Alice, 134 S.Ct. at 2355 (quoting Gottschalk, 409 U.S. at 67) (certain quotation marks omitted).

         2. Alice Step Two

         The Supreme Court has explained that step two of the Alice framework asks whether the claims contain an "inventive concept, " meaning "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." Alice, 134 S.Ct. at 2355 (internal quotation marks and citation omitted). The purpose of the "inventive concept" requirement is to "ensure that the claim is more than a drafting effort designed to monopolize the abstract idea." Id. at 2357 (internal quotation marks, citation, and brackets omitted).

         Neither "limiting the use of an abstract idea to a particular technological environment[, ]" nor simply stating an abstract idea and adding the words "apply it with a computer[, ]" will transform an abstract idea into a patent-eligible invention. Id. at 2358 (internal quotation marks and citations omitted). And the additional elements within the claim, apart from the abstract idea itself, must involve more than "'well-understood, routine, conventional activities]' previously known to the industry." Id. at 2359 (quoting Prometheus, 132 S.Ct. at 1294); see also Prometheus, 132 S.Ct. at 1300 ("[S]imply appending conventional steps, specified at a high level of generality, to ... abstract ideas cannot make those ... ideas patentable."). The Alice Court held that, based on these principles, "the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention." Alice, 134 S.Ct. at 2358. "Given the ubiquity of computers, " it said, "wholly generic computer implementation is not generally the sort of 'additional featur[e]' that provides any 'practical assurance that the . process is more than a drafting effort designed to monopolize the [abstract idea] itself.'" Id. (quoting Prometheus, 132 S.Ct. at 1297).

         C. Parties' Arguments

         The Court will now consider the representative claims from the '475 and '677 patents.

         1. The ...


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