United States District Court, D. Delaware
W. deBruin, THE DEBRUIN FIRM, LLC, Wilmington, DE; Leslie L.
Jacobs, Jr. and Gabriela I. Coman, RUBIN AND RUDMAN LLP,
Washington, D.C., Attorneys for Plaintiff.
E. Moore, Bindu A. Palapura, and Stephanie E. O'Byrne,
POTTER ANDERSON & CORROON LLP, Wilmington, DE; Craig
Kaufman, Michael C. Ting, and Fatima Alloo, TECHKNOWLEDGE LAW
GROUP LLP, Redwood City, CA, Attorneys for Defendant.
UNITED STATES MAGISTRATE JUDGE
before the Court in this patent infringement case is
Defendant Meta Company's ("Defendant" or
"Meta") motion to dismiss for failure to state a
claim (the "Motion"), filed pursuant to Federal
Rule of Civil Procedure 12(b)(6). (D.I. 11) Defendant argues
that Plaintiff Genedics, LLC's ("Plaintiff' or
"Genedics") asserted United States Patent Nos. 8,
319, 773 (the "773 patent"), 8, 477, 098 (the
"'098 patent"), 8, 730, 165 (the '"165
patent"), 8, 902, 225 (the '"225 patent"),
9, 110, 563 (the '"563 patent"), and 9, 335,
890 (the '"890 patent") (collectively, the
"asserted patents" or the
"patents-in-suit") are directed to
non-patent-eligible subject matter pursuant to 35 U.S.C.
§ 101 ("Section 101"), or, failing that, that
the direct, indirect, and willful infringement allegations in
the Complaint, (D.I. 1), fail to meet the
Twomblyllqbal pleading standard. (D.I. 11; D.I. 12
at 1-3) For the reasons that follow, the Court will DENY
Defendant's Motion, in the manner set out below.
patents-in-suit can be broken down into two families. (D.I.
12 at 4-6) The first family of patents consists of the
'098, '165, '563, and '890 patents, each of
which claims priority to United States Patent Application No.
11/932, 792 (which is now the '098 patent); these patents
all share a common specification. (Id. at 5) The
second family, consisting of the 773 and '225 patents,
claims priority to Patent Application No. 11/932, 450 (now
abandoned); both of these patents share a
common.specification. (Id. at 6) In general, the
asserted patents claim systems and methods for a
three-dimensional (or "3-D") user interface in
which sensors are able to sense user interaction with an
image, a processor correlates the user's interaction with
the image, and the processor then updates the image or alters
the image's location based on that interaction. (See
Id. at 6-7; D, I. 18 at 1; D.I. 33 (hereinafter
"Tr.") at 43; see also 773 patent,
Abstract; '098 patent, Abstract).
Complaint identifies two Meta products that are alleged to
infringe the asserted patents: the Meta 1 Development Kit and
the Meta 2 Development Kit (the "accused products"
or "development kits"). (See, e.g., D.I. 1
at ¶¶ 10, 25, 26; see also D.I. 12 at 3)
According to Defendant's website, '"Meta's
products enable people to manipulate digital objects or
holograms with their hands, as well as create and share
digital content with others in the same room or miles
away.'" (D.I. 1 at ¶ 11 (citation omitted))
Plaintiff alleges that "each of the Meta development
kits includes a Meta headset that displays holograms [J and
each includes Meta software built on top of the Unity 3D
software engine." (Id. at ¶ 33) And each
development kit "offer[s] direct hand interaction with
holograms." (Id. at ¶ 34) The headsets
included with the kits include "a sensor array to sense
hand interactions and positional tracking[, which makes it]
possible to see, grab[, ] and move holograms just like
physical objects." (Id. at ¶¶ 35-36)
The sensor array also "includes depth sensing technology
for determining the distance to a feature of the environment
or an object within the environment in which the Meta headset
is deployed." (Id. at ¶ 37)
Complaint also contains allegations that, on May 31, 2017,
Plaintiff sent a letter ("the May 31 letter") to
Defendant's general counsel identifying the asserted
patents and providing notice that Defendant infringed them.
(Id. at ¶ 12) Plaintiff included claim charts
for each of the patents along with this letter, "which
identified Meta's infringement of numerous claims, on an
element-by-element basis." (Id. at ¶ 13)
Defendant allegedly received the May 31 letter on June 2,
2017 and replied to Plaintiff on June 15, 2017. (Id.
at ¶¶ 14-15)
August 1, 2017, Plaintiff filed its Complaint. (D.I. 1) The
parties thereafter jointly consented to the Court's
jurisdiction to conduct all proceedings in the case,
including trial, the entry of final judgment, and all
post-trial proceedings. (D.I. 10)
September 28, 2017, Defendant filed the instant Motion (as
well as a motion to transfer the case to the Northern
District of California). (D.I. 11; D.I. 13) The parties
completed briefing on the instant Motion on October 19, 2017.
(D.I. 22) Thereafter, at the parties' joint request, the
Court stayed case deadlines pending the resolution of the
then-pending motions. (D.I. 24)
requested oral argument on both then-pending motions, (D.I.
25), and the Court granted argument on the instant Motion via
an Order dated January 12, 2018. Prior to oral argument,
Plaintiff filed a notice of subsequent authority, calling to
the Court's attention two recent decisions from the
United States Court of Appeals for the Federal Circuit:
Berkheimer v. HP Inc., 881 F.3d 1360 (Fed Cir. 2018)
and Aatrix Software, Inc. v. Green Shades Software,
Inc., 882 F.3d 1121 (Fed. Cir. 2018). Oral argument was
held on March 6, 2018.
STANDARD OF REVIEW
Standard of Review Regarding a Rule 12(b)(6) Motion
noted above, the entirety of Defendant's Motion is
premised on Rule 12(b)(6). 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).
assessing such a motion, first the court separates the
factual and legal elements of a claim, accepting "all of
the complaint's well-pleaded facts as true, but
[disregarding] any legal conclusions." Fowler v.
UPMC Shady side, 578 F.3d 203, 210-11 (3d Cir. 2009).
Second, the court determines "whether the facts alleged
in the complaint are sufficient to show that the plaintiff
has a 'plausible claim for relief" Id. at
211 (quoting Ashcroft, 556 U.S. at 679). A plausible
claim does more than merely allege entitlement to relief; it
must also demonstrate the basis for that "entitlement
with its facts." Id. Thus, a claimant's
"obligation to provide the 'grounds' of his'
entitle[ment] to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).
Rule 12(b)(6) Motions that Challenge Patent Eligibility
Pursuant to Section 101
in addition to arguing that Plaintiff did not sufficiently
plead facts establishing that the elements of direct,
indirect and willful infringement are met, Defendant is also
using the instant Motion to assert an affirmative
defense-that the asserted patents are subject matter
ineligible under Section 101. Below, the Court will first set
out legal standards relating to whether a patent claims
eligible subject matter. Thereafter, it will discuss other
considerations relevant to Rule 12(b)(6) motions that
challenge subject matter eligibility.
Legal Standards Relating to Patentable Subject
subject matter is defined in the Patent Act as follows:
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. 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 lnt'l, 134 S.Ct. 2347, 2354 (2014) (internal
quotation marks and citation omitted).
Alice Corp. Pty. Ltd. v. CLS Bank lnt'l, 134
S.Ct. 2347 (2014), the Supreme Court of the United States
provided the two-step framework for assessing whether a
patent contains eligible subject matter under Section 101.
to step one, courts "must... determine whether the
claims at issue are directed to a patent-ineligible concept[,
]" such as an abstract idea. Alice, 134 S.Ct.
at 2355. Here 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 [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)). "The abstract ideas category
embodies the longstanding rule that [a]n idea of itself is
not patentable." Alice, 134 S.Ct. at 2355
(internal quotation marks and citations omitted).
an abstract idea? It can be, but need not amount to, a
"preexisting, fundamental truth" about the natural
world "that has always existed," or a "method
of organizing human activity" (such as a
"longstanding commercial practice"). Id.
at 2356 (internal quotation marks and citations omitted);
see also DDR Holdings, LLC v. Hotels.com, L.P., 773
F.3d 1245, 1256-57 (Fed. Cir. 2014). A claim to an abstract
idea has been described by the Federal Circuit as one
directed to a "'disembodied' concept... a basic
building block of human ingenuity, untethered from any
real-world application[.]" CLS Bank lnt'l v.
Alice Corp. Pty. Ltd., Ill. F.3d 1269, 1286 (Fed. Cir.
2013) (citation omitted). Beyond that, the concept of an
"abstract idea" has not been crisply defined,
see Alice, 134 S.Ct. at 2357 (declining to
"labor to delimit the precise contours of the
'abstract ideas' category"), and the Supreme
Court and the Federal Circuit have found it sufficient to
compare claims at issue to those claims already found to be
directed to an abstract idea in previous cases, see
Enfish, 822 F.3d at 1334.
claims like those at issue here, which involve systems or
methods relating to computer technology, a relevant step one
question is whether the claims '"focus on a specific
means or method that improves the relevant technology' or
[instead] are 'directed to a result or effect that itself
is the abstract idea[.]'" Apple, Inc. v.
Ameranth, Inc., 842 F.3d 1229, 1241 (Fed. Cir. 2016)
(quoting McRO, Inc. v. BandaiNamco Games Am. Inc.,
837 F.3d 1299, 1314 (Fed. Cir. 2016)). Put differently,
courts try to ascertain whether the "claims do no more
than describe a desired function or outcome, without
providing any limiting detail that confines the claim to a
particular solution to an identified problem."
Affinity Labs of Tex., LLC v. Amazon.com Inc., 838
F.3d 1266, 1269 (Fed. Cir. 2016). At step one, courts should
not "oversimplif[y]" an invention's key
inventive concepts or "downplay" its benefits.
Enfish, LLC, 822 F.3d at 1337-38; see also McRO,
Inc., 837 F.3d at 1313 ("[C]ourts 'must be
careful to avoid oversimplifying the claims'' by
looking at them generally and failing to account for the
specific requirements of the claims.") (citation
does one know what a patent claim is "directed to"?
The Federal Circuit has indicated that the patent's
specification can be helpful in answering that question. If a
claim contains a particular element or elements that are
described by the patent's specification as what the
"present invention comprises" or as being "the
innovation over the prior art" or the "the
essential, most important aspect" of the patented
invention, then it stands to reason that the claim is
"directed to" that element or concept. See
Enfish, 822 F.3d at 1337; Internet Patents
Corp., 790 F.3d at 1348; see also Kaavo, Inc. v.
Amazon.com Inc., Civil Action No.
15-638-LPS-CJB, Civil Action No. 15-640-LPS-CJB, 2016 WL
6562038, at *6 (D. Del. Nov. 3, 2016). And if that element or
concept is not itself an abstract idea, then the claim is not
ineligible. That said, the Federal Circuit has recognized
that in some cases "involving computer-related claims,
there may be close calls about how to characterize what the
claims are directed to"; in such cases, "an
analysis of whether there are arguably concrete improvements
in the recited computer technology [may] take place under
step two." Enfish, 822 F.3d at 1339.
claim is directed to an abstract idea, then step two
of the Alice framework requires a court to assess
"[w]hat else is there in the claims"; a court does
so 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." Alice, 134 S.Ct. at 2355
(internal quotation marks and citation omitted). The Supreme
Court describes step two 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); see also
Berkheimer, 881 F.3d at 1367. 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." Alice, 134 S.Ct.
at 2357 (internal quotation marks, citation, and brackets
"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 Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
66, 73 (2012)); see also Prometheus, 566 U.S. at 82
("[S]imply appending conventional steps, specified at a
high level of generality, to ... abstract ideas cannot make
those ... ideas patentable.").
How to Assess Section 101 Challenges Pursuant to Rule
Defendant's Section 101 challenge is made at the pleading
stage (in the form of the assertion of an affirmative
defense), dismissal is permitted "only when there are no
factual allegations that, taken as true, prevent resolving
the eligibility question as a matter of law." Aatrix
Software, Inc., 882 F.3d at 1125. While patentability
under Section 101 is ultimately a question of law,
Berkheimer, 881 F.3d at 1365; see also In re
Bilski, 545 F.3d 943, 951 (Fed. Cir. 2008),
aff'd, Bilski v. Kappos, 561 U.S. 593 (2010),
this question of law is also one that "may contain
underlying issues of fact[, ]" Berkheimer, 881
F.3d at 1365 (citing Mortg. Grader, Inc. v. First Choice
Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016));
see also Aatrix Software, Inc., 882 F.3d at 1128
("While the ultimate determination of eligibility under
[Section] 101 is a question of law, like many legal
questions, there can be subsidiary fact questions which must
be resolved en route to the ultimate legal
Federal Circuit has explained that "plausible factual
allegations may preclude dismissing a case under [Section]
101 where, for example, nothing on th[e] record ... refutes
those allegations as a matter of law or justifies dismissal
under Rule 12(b)(6)." Aatrix Software, Inc.,
882 F.3d at 1125 (second alteration in original) (internal
quotation marks and citation omitted). Factual allegations
that might preclude dismissal at the Rule 12 stage include
those relating to "[w]hether something is
well-understood, routine, and conventional to a skilled
artisan at the time of the patent[.]"
Berkheimer, 881 F.3d at 1369; see also Aatrix
Software, Inc., 882 F.3datll28.
Assessing "Representative" Claims
noted above, Defendant relies upon certain representative
claims in arguing that all asserted claims of the patents are
subject matter ineligible. "Courts may treat a claim as
representative in certain situations, such as if the patentee
does not present any meaningful argument for the distinctive
significance of any claim limitations not found in the
representative claim or if the parties agree to treat a claim
as representative." Berkheimer, 881 F.3d at
1365 (citations omitted).
courts in this District have elucidated "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."
Cronos Techs., LLC v. Expedia, Inc., C.A. No.
13-1538-LPS, 2015 WL 5234040, at *2 (D. Del. Sept. 8, 2015).
Those considerations were set out 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