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Search and Social Media Partners v. Facebook, Inc.

United States District Court, D. Delaware

February 13, 2019

SEARCH AND SOCIAL MEDIA PARTNERS, Plaintiff,
v.
FACEBOOK, INC.; INSTAGRAM, INC, and INSTAGRAM, LLC, Defendants. LOCATION BASED SERVICES, LLC, Plaintiff,
v.
SONY ELECTRONICS, INC., Defendant. LOCATION BASED SERVICES, LLC, Plaintiff,
v.
FANTASTIC FOX, INC., Defendant. LOCATION BASED SERVICES, LLC, Plaintiff,
v.
MAPILLARY INC., Defendant. MOAEC TECHNOLOGIES, LLC, Plaintiff,
v.
DEEZER S.A. and DEEZER INC., Defendants. MOAEC TECHNOLOGIES, LLC, Plaintiff,
v.
SOUNDCLOUD LIMITED and SOUNDCLOUD, INC., Defendants. MOAEC TECHNOLOGIES, LLC, Plaintiff,
v.
SPOTIFY USA INC., Defendant.

          MEMORANDUM ORDER

          HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE

         At Wilmington this 13th day of February, 2019:

         The Court having heard oral argument in all of the above-listed cases on February 8, 2019, IT IS HEREBY ORDERED that:

         1. Search and Social Media Partners, LLC's motion for reconsideration (C.A. No. 17-1120 D.I. 25) is DENIED.

         2. Sony Electronics, Inc.'s motion to dismiss (C.A. No. 18-283 D.I. 11) is GRANTED as to claim 6 of the patent-in-suit.

         3. Fantastic Fox, Inc.'s motion to dismiss (C.A. No. 18-1424 D.I. 8) is GRANTED as to claim 6 of the patent-in-suit.

         4. Mapillary Inc.'s motion to dismiss (C.A. No. 18-1425 D.I. 11) is GRANTED as to claim 6 of the patent-in-suit.

         5. Deezer S.A.'s motion to dismiss (C.A. No. 18-375 D.I. 16) is GRANTED with respect to lack of patentable subject matter and DENIED AS MOOT in all other respects. MOAEC Technologies, LLC's motion to amend (C.A. No. 18-375 D.I. 48) is GRANTED for the limited purpose of completing the record.

         6. Soundcloud Limited and Soundcloud, Inc.'s motion to dismiss (C.A. No. 18-376 D.I. 11) is GRANTED with respect to lack of patentable subject matter and DENIED AS MOOT in all other respects. MOAEC Technologies, LLC's motion to amend (C.A. No. 18-376 D.I. 42) is GRANTED for the limited purpose of completing the record.

         7. Spotify USA Inc.'s motion to dismiss (C.A. No. 18-377 D.I. 13) is GRANTED with respect to lack of patentable subject matter and DENIED AS MOOT in all other respects. MOAEC Technologies, LLC's motion to amend (C.A. No. 18-377 D.I. 49) is GRANTED for the limited purpose of completing the record.

         All of the foregoing motions were argued at the February 8 hearing and the rulings provided above were all announced from the bench at the conclusion of the hearing, as follows:

I'm going to rule on all of the motions that were argued today. I will not be issuing written opinions in any of the cases on the motions that were argued today, but I want to emphasize before I get into the rulings that I hope nobody will make any mistake about this. We have followed, I assure you, a full and thorough process before I made my decisions.
Obviously, there was full briefing on all the motions, then there was the checklist[1] letters which we carefully considered. There was extensive oral argument today. There were two judges that looked at everything. [2] And there were a lot of law clerks over the course of the day. You may have counted, there have been five law clerks that have helped Judge Burke and myself on these motions.
And we spent a lot of time together, not just today but leading up to today. So really the only thing that I haven't done is take the time to write an opinion, but I have taken the time with the assistance of all of these folks to try to organize my thoughts and articulate the basis for my decisions. So even though I am ruling from the bench and not writing an opinion, I hope it won't be mistakenly thought that we haven't put the time and the effort and the thought into reaching these decisions.
One of the reasons that I am going ahead and just ruling on these motions is related to one of the points I have tried to make this morning. This is an effort to deal with the fact that because there are so many 101 motions out there, it follows understandably that we're getting so many 101 opinions from the Federal Circuit. My team here did some research and by our rough calculations over the last two years, the Federal Circuit has issued roughly two opinions each month dealing with 101 issues, and that doesn't count Rule 36 affirmances, so that actually understates the amount of authority and guidance we get from the Federal Circuit on 101 issues.
So they're issuing opinions on 101 at a rate of around twice a month. And between Judge Burke and myself, it turns out we're issuing opinions at the rate of about one a month, but it is taking us on average two months after argument to get our opinion out, and we usually do have argument. So if I did the math correctly, I think that means on average about four new Federal Circuit opinions are coming out in that lag time between argument and written decision, and that is challenging in terms of subsequent authority, et cetera.
So I don't want that to happen on the motions that were argued today. I have decided what to do, and I'm going to just tell you.
I am not going to read into the record my understanding of Section 101 law. I have a legal standard[s] section that I include[, ] sometimes with a small amount of modification[, ] in essentially all of my Section 101 decisions. I hereby adopt the entirety of that legal standard[s] section. . .. [S]pecifically. I'm [adopting] by reference the discussion ... of 101 law that can be found in my September 28th 2018 opinion in the SSMP case.[3]
All right. Let's get to the cases.
So first is the MOAEC cases. [4] That is what was argued first this morning.
Defendants Deezer, SoundCloud, and Spotify moved under Rule 12(b)(6) to dismiss complaints filed by plaintiff MOAEC. My ruling today relates only to [Defendants' contention that the claims of the patent, of the patent-in-suit, it's the '539 patent[, [5] . . . claim patent ineligible subject matter under Section 101. The defendants had originally challenged the sufficiency of the pleadings under Iqbal and Twombly, [6] but they have withdrawn that portion of their challenge.
Applying the law as I understand it, and having carefully reviewed the entire record and heard oral argument, I agree with the defendants. The asserted claims are directed to patent ineligible subject matter, so I will be granting the motions in the MOAEC cases.
I start with claim 1 of the '539 patent. [At] Alice[7] Step 1, I find that claim 1 is directed to the abstract idea of accessing music by category. The crux of claim 1 is the ability to use a graphical user interface or GUI... to display a list of music that matches a certain category. The use of a flag to find music in a certain category, whether by genre, artist, or ownership[, ] is an abstract idea.
In this respect, the Court agrees with the defendants' comparison of the present case to the Affinity Labs v. Amazon[8]case of the Federal Circuit in 2016.
MOAEC's argument that claim 1 satisfies Step 1 because it recites specific hardware lacks merit. [A] claim that recites hardware may nevertheless be directed to an abstract idea. For example, the claims in Alice recited hardware, such as a data processing system, including a data storage unit and a computer.
MOAEC also argues that the claim[] satisf[ies] Step 1 because it solves a problem that is unique to digitized music, namely, copyright infringement and unauthorized use of music.
MOAEC's argument, though, lacks support in the intrinsic record.
The ownership category flag, which seems to be where the plaintiff finds this concept in the patent, didn't appear in the claims until after the reexamination. The specification says very little about the ownership category flag. The specification states that an ownership category flag allows users to tell which songs are on the user's computer. That is what the term is doing in the claims.
The claim limitation added in the reexam says, "wherein one of the category flags comprises an ownership category flag that indicates which music selections from the list of all music selections are currently resident in the storage device." The specification does not, however, describe an ownership category flag as providing the sort of access control mechanism MOAEC suggests.
The specification does describe a method for locking songs to prevent unauthorized playback, but this is achieved using a serial number and an encryption key, not an ownership category flag.
It may be that plaintiff thinks that preventing copyright infringement is a benefit of [the invention].. . . [B]ut [if] that purported benefit of the invention is captured in the claims through the proper construction of some disputed claim term, . . . plaintiff has not said so[, ] neither in the briefs nor in the checklist in which I specifically asked for the parties to identify any claim terms they thought were in dispute and how those disputes might affect the outcome on the 101 motion. Nor has plaintiff proposed a construction of any claim term that would accomplish what the plaintiff says this claim is about.
I sensed today, maybe the plaintiff is suggesting there is a dispute about what ownership means in the context of the claim, but if so, this is too little/too late. The plaintiff has not even offered a construction of "ownership." Instead, plaintiff expressly took the view in the checklist response that claim construction is not necessary before resolving the Rule 12 motion and said that to the extent I'm even considering claim construction, I should [adopt] the claim construction of "category flag" that was adopted in the earlier MOAEC Inc. case[. . . .]
I hereby do so for purposes of the motion. I have adopted the construction of that other court of "category flag, "[9] but that adoption doesn't help the plaintiff. The term construed there ... was "category flag" and that construction doesn't reference ownership or copyright infringement.
I find that the plaintiff has waived the opportunities I have provided to make the claim construction argument it seems belatedly to suggest that it may want to make.
Moreover, even if [the plaintiff] were making that argument, there appears to be a lack of intrinsic support for a construction of the "ownership category flag" term, or even of the "ownership" term[, ] that would get the concepts of protection against copyright infringement into the claims. There is no specification support, and I don't even think there is any prosecution history support even in the reexamination history where this limitation was added to the claims. I don't see any support in any of that for a construction of "ownership" or "ownership category flag" that would bring these concepts, the purported invention[, ] into the claims. I would not, even for purposes of a Rule 12 motion, assume an implausible claim construction.
And so we don't even have a proposed construction. If we did, my sense is it would be implausible and would ...

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