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S.I.SV.EL. Societa Italiana Per lo Sviluppo Dell'Elettronica S.P.A. v. Rhapsody International Inc.

United States District Court, D. Delaware

March 8, 2019

SPOTIFY USA INC., Defendant.

          Timothy Devlin, DEVLIN LAW FIRM LLC, Wilmington, DE, Attorney for Plaintiff.

          David E. Moore, Bindu A. Palapura and Stephanie E. O'Byrne, POTTER ANDERSON & CORROON LLP, Wilmington, DE; Patrick Bageant, HOLLYSTONE LAW, Boise, ID, Attorneys for Defendant Rhapsody International Inc.

          David E. Moore, Bindu A. Palapura and Stephanie E. O'Byrne, POTTER ANDERSON & CORROON LLP, Wilmington, DE; Stefani E. Shanberg, MORRISON & FOERSTER LLP, San Francisco, CA, Attorneys for Defendant Spotify USA Inc.



         Presently before the Court in this patent infringement case is Defendant Rhapsody International Inc. ("Rhapsody") and Defendant Spotify USA Inc.'s ("Spotify" and collectively, "Defendants") "Early Motion for Summary Judgment of Invalidity Pursuant to 35 U.S.C. § 101 ["Section 101"]" (the "Motion"), filed pursuant to Federal Rule of Civil Procedure 56. (D.I. 9)[1]Defendants argue that Plaintiff S.I.SV.EL. Societa Italiana per lo Sviluppo Dell'Elettronica S.p.A's ("Plaintiff') asserted United States Patent Nos. 7, 412, 202 (the "'202 patent"), 8, 490, 123 (the '"123 patent"), 7, 035, 863 (the "'863 patent"), 8, 321, 456 (the "'456 patent"), and 7, 734, 680 (the '"680 patent") (collectively, the "asserted patents" or the "patents-in-suit") are directed to non-patent-eligible subject matter pursuant to Section 101. (D.I. 11) This Memorandum Opinion will address the Motion as it relates to the '202 patent only.[2] For the reasons set out below, the Court GRANTS Defendants' Motion as it relates to that patent.

         I. BACKGROUND

         A. Factual Background

         The '202 patent is entitled "Method and Apparatus for Generating Recommendations based on User Preferences and Environmental Characteristics." (D.I. 1, ex. 1 (the '"202 patent")) The technology described in the '202 patent "relates to recommendation systems, such as recommenders for audio programming, television programming or other content, and more particularly, to a method and apparatus for generating recommendations based on environmental characteristics, such as [] geographic location, characteristics of the location or the weather." ('202 patent, col. 1:8-13; see also id., Abstract (noting that, in general, the patent discloses "[a] recommendation system ... that generates recommendations for one or more items based on user preferences and one or more environmental factors[]")) The '202 patent contains 35 claims, of which six (claims 1, 7, 15, 23, 26 and 31) are independent claims. (Id., cols. 5:56-8:54)

         By way of setting out the need for the asserted invention at issue, the '202 patent explains that at the time, users of electronic devices (like portable radios) could receive a transmitted audio signal from a given radio station at an assigned frequency within a certain radius of the station's antenna. (Id., col. 1:17-23) "As the user moves away from the transmitting antenna, however, the received signal gradually degrades until the user eventually must select a new radio station." (Id., col. 1:23-26) The patent notes that in such a scenario, if the user was in an unfamiliar radio market, or if there were a large number of frequencies to choose from, this might make it challenging for the user to select a new station. (Id., col. 1:26-32) It then explains that, at the time, there were systems that provided a solution to this problem-systems that could identify a "program type" field associated with each radio station, such that a user could select a new radio station based on the user's preferred program type. (Id., col. 1:34-42) This type of "program type code" could be used to "enable suitable receivers and recorders to be pre-set to respond only to programs of the desired type." (Id., col. 1:42-44)[3]

         However, the '202 patent explains that these prior art systems also had some limitations. That is, they did not account for "the current location of the user or other environmental factors." (Id., col. 1:48-49) "For example, in a given geographic area, the user may have a preferred radio station having a program type that is distinct from the user's program type preferences in his or her home area." (Id., col. 1:49-52) According to the patent, a need thus existed for: (1) "a method and apparatus for making recommendations based on the preferences of the user and environmental characteristics, such as location, characteristics of the location or weather[;]" (2) "a method and apparatus for lea[rn]ing a user[']s preferences under various environmental characteristics[;]" and (3) a "method and apparatus for selecting an alternate radio station or another item based on the user[']s demonstrated preferences under similar environmental characteristics, such as in the same or a similar geographic area." (Id., col. 1:53-62) The '202 patent, as is further described below, purports to have addressed these needs. (Id., cols. 1:65-2:20)

         B. Procedural Background

         On January 8, 2018, Plaintiff filed its Complaint. (D.I. 1) On March 22, 2018, Defendants filed the instant Motion. (D.I. 9) The parties thereafter jointly consented to the Court's jurisdiction to conduct all proceedings and to enter a final order as to the Motion. (D.I. 10)

         The parties completed briefing on the instant Motion on June 19, 2018. (D.I. 20) Defendants requested oral argument on the pending Motion, (D.I. 22), and the Court held argument on November 7, 2018, (D.I. 23 (hereinafter "Tr.")).


         A. Standard of Review Regarding a Rule 56 Motion

         A grant of summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585 n.10 (1986). If the moving party has sufficiently demonstrated the absence of such a dispute, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Id. at 587 (internal quotation marks, citation and emphasis omitted). If the nonmoving party fails to make a sufficient showing in this regard, then the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). During this process, the Court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

         However, in order to defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586-87. The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Facts that could alter the outcome are "material," and a factual dispute is "genuine," only where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. "If the evidence is merely colorable ... or is not significantly probative ... summary judgment may be granted." Id. at 249-50 (internal citations omitted).

         A party asserting that a fact cannot be-or, alternatively, is-genuinely disputed must support the assertion either by citing to "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials"; or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A) & (B).[4]

         B. Legal Standards Relating to Patentable Subject Matter

         Patent-eligible 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 Int'l, 134 S.Ct. 2347, 2354 (2014) (internal quotation marks and citation omitted).

         In. Alice Corp. Pty. Ltd. v. CLS Bank Int'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. The Court briefly discusses both of these steps below.

         1. Step One

         Pursuant 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 ...

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