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S.A. v. HTC Corp.

United States District Court, D. Delaware

July 5, 2019

3G LICENSING, S.A., KONINKLIJKE KPN N.V., and ORANGE S.A., Plaintiffs,
v.
HTC CORPORATION and HTC AMERICA INC., Defendants. 3G LICENSING, S.A., KONINKLIJKE KPN N.V., and ORANGE S.A., Plaintiffs,
v.
LENOVO GROUP LTD., LENOVO HOLDING CO., INC., LENOVO UNITED STATES INC., and MOTOROLA MOBILITY, LLC, Defendants. 3G LICENSING, S.A., KONINKLIJKE KPN N.V., and ORANGE S.A., Plaintiffs,
v.
LG ELECTRONICS INC., LG ELECTRONICS U.S.A, INC. and LG ELECTRONICS MOBILECOMM U.S.A., INC., Defendants. ALIGN TECHNOLOGY, INC., Plaintiff,
v.
3SHAPE A/S and 3SHAPE INC., Defendants. ALIGN TECHNOLOGY, INC., Plaintiff,
v.
3SHAPE A/S and 3SHAPE INC., Defendants. ALIGN TECHNOLOGY, INC., Plaintiff,
v.
3SHAPE A/S, 3SHAPE TRIOS A/S, and 3SHAPE INC., Defendants. DIGI PORTAL, LLC, Plaintiff,
v.
QUOTIENT TECHNOLOGY INC., Defendant.

          MEMORANDUM ORDER

          HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE.

         At Wilmington this 5th day of July, 2019:

         The Court having heard oral argument in all of the above-listed cases on June 18, 2019, [1] IT IS HEREBY ORDERED that:

         1. Quotient Technology, Inc.'s motion to dismiss (C.A. No. 18-1485 D.I. 11) is DENIED.

         2. Align Technology, Inc.'s motions to strike (C.A. No. 17-1646 D.I. 105; C.A. No. 17-1647, D.I. 91) are DENIED.

         3. 3Shape A/S et al.'s motions to dismiss (C.A. No. 17-1646 D.I. 102; C.A. No. 17-1647 D.I. 88) are GRANTED.

         4. 3Shape A/S et al.'s motion to dismiss (C.A. No. 18-1949 D.I. 11) remains pending, although the Court announced it will deny the motion at least with respect to Count I (relating to the '420 Patent).

         5. Defendants HTC Corp., Lenovo Group Ltd., and LG Electronics Inc.'s motions for judgment on the pleadings (C.A. 17-83 D.I. 270; C.A. 17-84 D.I. 247; C.A. 17-85 D.I. 243) are DENIED.

         6. Google, LLC's motion to dismiss (C.A. No. 18-1587 D.I. 7) is DENIED IN PART (with respect to the '073, '027, '729 and '691 Patents) and GRANTED IN PART (with respect to the '708 Patent).

         7. Location Based Services LLC's motion to amend its complaint (C.A. No. 18-1587 D.I. 38) is DENIED.

         All of the foregoing motions were argued at the June 18 hearing and the rulings provided above were all announced from the bench at the conclusion of the hearing, as follows:

. . . As you will imagine, because there were so many motions [argued], I do have quite a bit to say, so here we go with that.
First, in terms of the legal standards, I don't think anything was in dispute, but for purposes of the record I am adopting incorporating by reference my September 2018 decision in the Align cases, the 17-1646 and 17-1647.[2] So what I think of the Rule 12(b)(6) standard and Section 101 law is set out there; and I'm not going to read it into the record but I do hereby adopt it by reference. Let me discuss the cases that were argued today in the order they were argued.
First was the Digi Portal case.[3] That was the first case argued this morning. In the Digi Portal case, the defendant Quotient Technology moved to dismiss the complaint under Rule 12(b)(6) on the basis of Section 101.
Applying the law as I understand it, and having carefully reviewed the entire record and heard oral argument -- and I should just sa[y] I have carefully reviewed the entire record in all these cases and, of course, heard oral argument in all these cases so I may not repeat that, but we did go through that very same process for all the cases -- but having done so in the Digi Portal case, I find that the defendant has not shown that the '854 patent[4] claims ineligible subject matter so I am denying defendant's motion in the Digi Portal case.
Quotient argues that claim 1 is representative. Because, as I will explain, I find that Quotient has failed to meet its burden to show that claim 1 is not patent eligible and because Quotient's position is that claim 1 is representative of all asserted claims, I need only analyze claim 1. There is no basis to find any other claim directed to non-patentable subject matter given my findings with respect to claim 1's patentability.
At Step 1 of Alice, [5] I find that defendant oversimplified the abstract idea. The claim is directed to more than just providing targeted information, including advertising to a user.
Claim 1 recites a new way of generating customized web pages to improve the efficiency and scaleability of delivering them. The patent specification further explains that this implementation is intend[ed] to resolve technological problems in the prior art, including long wait times to load pages in browsers and clog[ged] networks due to continuous streaming and large amounts of local storage that quickly becomes out of date.
While it may be possible that claim 1 could be accurately characterized as directed to some abstract idea, all I need to decide today is that the claim is not directed to the abstract idea articulated by defendant.
Defendant's characterization of the claim is not correct. My denial of defendant's motion is without prejudice, so depending on how the record develops, defendant may have another opportunity to try to meet its burden at Step 1.
Turning to Step 2, defendant has failed to show by clear and convincing evidence that claim 1 lacks an inventive concept. To the contrary, based on the record as it currently exists and taking all well pled facts as true, the claim at least captures the inventive concept of storing the template program in at least two locations and . . . determining from which locations to retrieve the template based on the frequency of the user request for the customized page. These inventive concepts are stated with specificity in the second element of the claimed method. At least one exemplary embodiment is discussed in the specification at Columns 4 to 5 in reference to Figures 2 and 4.
While it is true that “merely adding computer functionality to increase the speed or efficiency of a process does not confer patent eligibility, ” and that is a quote from the Federal Circuit's decision at Intellectual Ventures v Capital One Bank, 792 F.3d at page 1369, [6] while that is true, the Court is not persuaded that this is what is going on here. Rather, the invention is changing the computer functionality to improve the efficiency of the technological process that was already using a computer. While defendant points to another patent in the prior art, the '430 patent, [7] purportedly to demonstrate that retrieving customized pages from a cache is conventional, . . . defendant's argument only raises a potential factual dispute that I am unable to resolve at this stage.
That was all I had to say on the Digi Portal case where, again, the motion is denied. I will now turn to the Align v 3Shape cases. First, the [20]17 cases, 17-1647 and 17-1646.
The defendants here, 3Shape A/S, 3Shape Inc., and 3Shape TRIOS who I may collectively refer to as “3Shape, ” have moved to dismiss the complaint filed by Align Technology Inc., “Align” for failure to state a claim under Rule 12(b)(6) on the basis of Section 101.
Before I can address the motions to dismiss, I must address Align's motion to strike the 12(b)(6) motion based on Rule 12(g)(2).
Align argues that two of the three defendants previously filed a 12(b)(6) motion to dismiss the original complaint and to invalidate all the claims on the basis of Section 101 only to abandon that broad position and voluntarily agree to limit their challenge only to claim 1 of each patent.
The Court in its September 7th decision[8] invalidated claim 1 of both patents under Section 101. However, Align thereafter filed an amended complaint accusing for the first time the third defendant, 3Shape TRIOS of infringement.
I have decided to deny the motion to strike. The new defendant, 3Shape TRIOS is entitled to file its own Rule 12 motion in each case. The pending motions are 3Shape TRIOS's first opportunity to file Rule 12 motions. Align has not cited any authority for its contention that a new defendant[, ] even one related to or associated with an original defendant[, ] is somehow bound to the earlier motions practice to which it was not a party and therefore should be precluded from filing its own motion.
Now, I don't expect and I certainly don't intend to invite serial Rule 12 motions. That would be improper and a violation of the rules. It would also be highly disrespectful of the Court's overstressed and limited judicial resources. Here, however, for whatever reason, the plaintiff voluntarily chose to file an amended complaint against a new defendant. That triggered a right in the new defendant to file a Rule 12 motion. In other words, Align opened the door to these new motions and the Court is not going to deprive the new defendant of its opportunity under Rule 12 to move to dismiss.
Turning to the merits of the motions to dismiss. First, in the 17-1646 motion, the motion is granted with respect to the '065 patent.[9]
For Step 1, Align states that claim 7 is representative but does not say how claim 7 is distinguishable from the already invalid claim 1. In the Court's view, claims 1 and 7 are nearly identical in substance. There are some nondispositive differences to the preamble. Thus, for the reasons stated in the Court's September 7th decision which again I will incorporate hereby by reference, I find that all of the asserted claims of the '065 patent are directed to the abstract concept of modifying a finish line of a dental prothesis.
While Align argues that the '065 patent teaches a specific method for updating a finish line using newly acquired second finish line data, the claim is not specific about that process. It does not, for instance, provide a particular method for automatically generating a finishing line or a specific process for incorporating a technician or a dentist['s] manual adjustments. Rather, claim 7 is directed at a general computerized process that previously had been done manually, creating a first finishing line that may be manually modified. The use of a computer is distinguishable from the manual process only insofar as the computer reduces the back and forth between technicians or dentists when adjusting the ...

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