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Gracenote, Inc. v. Free Stream Media Corp.

United States District Court, D. Delaware

December 11, 2019

GRACENOTE, INC., Plaintiff;

          David E. Moore, Bindu A. Palapura, and Stephanie E. O'Byrne, POTTER ANDERSON & CORROON LLP, Wilmington, DE; Steven Yovits and Mark Scott, KELLEY DRYE & WARREN LLP, Chicago, IL; and Clifford Katz and Malavika Rao, KELLEY DRYE & WARREN LLP, New York, NY, attorneys for Plaintiff.

          Kelly E. Farnan, RICHARDS, LAYTON & FINGER, PA., Wilmington, DE; Sten Jensen, ORRICK HERRINGTON & SUTCLIFFE LLP, Washington, D.C.; Clement Seth Roberts, ORRICK HERRINGTON & SUTCLIFFE LLP, San Francisco, CA; and Alyssa Caridis, ORRICK HERRINGTON & SUTCLIFFE LLP, Los Angeles, CA, attorneys for Defendant.



         Before me is the Report & Recommendation ("Report") of a United States Magistrate Judge. (D.I. 22). It addresses Defendant's Motion to Dismiss for Failure to State a Claim under Rule 12(b)(6). (D.I. 10). Defendant filed objections to the Report. (D.I. 23). Plaintiff responded to Defendant's objections. (D.I. 24). The Magistrate Judge's Report is comprehensive, and I will adopt the factual findings and legal conclusions in the Report. I do not separately recite any of them except as I think necessary to explain my decision.


         Magistrate Judges have the authority to make recommendations as to the appropriate resolution of a motion to dismiss pursuant to 28 U.S.C. § 636(b)(1)(B). In the event of an objection, this Court reviews the objected-to determinations de novo.

         When reviewing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court must accept the complaint's factual allegations as true. See Bell Ail. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Rule 8(a) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 555. The factual allegations do not have to be detailed, but they must provide more than labels, conclusions, or a "formulaic recitation" of the claim elements. Id. ("Factual assumptions must be enough to raise a right to relief above the speculative level ... on the assumption that the allegations in the complaint are true (even if doubtful in fact)."). There must also be sufficient factual matter to state a facially plausible claim to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the complaint's factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. ("Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." (internal quotation marks omitted)).


         Defendant objects to the Report's findings that U.S. Patent Nos. 8, 171, 030 ("the '030 Patent"), as well as 9, 066, 114, 9, 479, 831, and 9, 407, 962 (collectively, the "Trigger Patents") claim patent-eligible subject matter.

         a. The'030 Patent

         Defendant's first objection to the Report is that it failed to find that claim 1 of the '030 Patent is directed to an abstract idea. (D.I. 23 at 4). Defendant asserts that the Report misapplied the Federal Circuit's ruling in Enfish LLC v. Microsoft Corporation because the '030 Patent claims using a well-known "tree" database to index and store videos using a "robust hash" and "traversal index," which are "abstract concepts that long predate videos and video databases." (Id. at 3; citing 822 F.3d 1327 (Fed. Cir. 2016)). In Enfish, the Federal Circuit held that claims to a new, specific way of structuring a database were patent-eligible. 822 F.3d at 1337-38; see Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (explaining that the claims in Enfish were eligible "because [they] focused not on asserted advances in uses to which existing computer capabilities could be put, but on a specific improvement... in how computers could carry out one of their basic functions"). Defendant asserts that the Report merely "[i]dentif[ied] purported benefits stemming from the use of an abstract idea," which do not make a claim patent-eligible. (D.I. 23 at 4; citing OIP Techs., Inc. v., Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015)).

         Defendant also argues that the focus of the claim in the asserted patent is essentially a claim to the "creation of an index used to search and retrieve information stored in a database," which is an abstract idea. (D.I. 23 at 4; citing Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1327 (Fed. Cir. 2017)). Defendant contends, "The alleged improvement of using a robust hash as a traversal index does not 'enable[] a computer... to do things it could not do before.'" (D.I. 23 at 4; citing Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1305 (Fed. Cir. 2018)).

         Plaintiff argues that Defendant improperly isolates certain elements of the asserted claims in order to argue that these elements were known in the prior art. (D.I. 24 at 1). Plaintiff emphasizes the structure and efficiency of the invention described by the asserted claims, specifically the improvement on the structure of the database and the way traversal indexes are formulated and used. (D.I. 24 at 10; D.I. 1, Ex. E at 1:54-59, 2:2-13, 8:52-54, 15:29-34). Unlike the claims of Erie, which simply "created a system like the index at the back of a book," Plaintiff contends that the claims of the '030 patent more analogously describe a novel improvement in the organizational structure of a database or the generation of a traversal index. (D.I. 24 at 10).

         In her report, the Magistrate Judge applied the two-step framework set forth by the Supreme Court in Mayo and Alice Corp. Pty. Ltd. v. CLS Bank Intern.,134 S.Ct. 2347 (2014). (D.I. 22 at 15-18). This framework requires the Court 1) to determine whether the claims are directed to a patent-ineligible concept - such as a law of nature, natural phenomenon, or abstract idea - and, if they are, 2) to determine whether there is an 'inventive concept... 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 alterations omitted). In applying this framework, the Magistrate Judge emphasized the factual similarity between Claim 1 of the '030 patent and the claims found to be patent-eligible in Enfish. ...

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